Average Long-term US Mortgage Rate Rises to 6.75%

Introduction to the Current Mortgage Rate Trend

The average rate on a 30-year U.S. mortgage rose for the second week in a row, another setback for the U.S. housing market, which is mired in a sales slump as affordability constraints shut out prospective homebuyers.

By ALEX VEIGA, AP Business Writer

The long-term rate ticked up to 6.75% from 6.72% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.77%.

Impact on Homebuyers and the Housing Market

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate increased to 5.92% from 5.86% last week. A year ago, it was 6.05%, Freddie Mac said.
When mortgage rates rise they can add hundreds of dollars a month in costs for borrowers and reduce their purchasing power. That’s helped keep the U.S. housing market in a sales slump that dates back to 2022, when mortgage rates began to climb from the rock-bottom lows they reached during the pandemic.
Last year, sales of previously occupied U.S. homes sank to their lowest level in nearly 30 years. They’ve remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have continued to climb, albeit more slowly.

Factors Influencing Mortgage Rates

Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation.
The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.45% at midday Thursday, down from 4.46% late Wednesday.
Yields have largely moved higher this month as traders bet that a better-than-expected June jobs report could keep the Fed on hold when it comes to interest rates.

Recent Market Movements and Their Causes

Bond investors briefly drove longer-term yields higher Wednesday, after President Donald Trump said he had discussed the “concept” of firing the chair of the Federal Reserve but was unlikely to do so.
The president has been calling for Powell to cut interest rates. A less independent Fed could mean lower short-term rates, but it could have the opposite effect on the longer-term bond yields that influence the rates on home loans.

Projections and Expectations for Mortgage Rates

The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, set in mid-January. The 30-year rate’s low point this year was in early April when it briefly dipped to 6.62%.
The rise in mortgage rates appears to have discouraged some home shoppers. Mortgage applications fell 10% last week from a week earlier as higher rates and economic uncertainty dampened demand, according to the Mortgage Bankers Association.
Economists generally expect mortgage rates to stay relatively stable in the coming months, with forecasts calling for the average rate on a 30-year mortgage to remain in a range between 6% and 7% this year.

Affordability and the Median Homebuyer

While that would be roughly in line with the historical average rate on a 30-year mortgage, it’s little comfort to many would-be homebuyers after years of soaring home prices.
Consider, the U.S. median household annual income is about $80,000. But with a mortgage rate of 6.75%, a homebuyer would need an annual income of nearly $130,000 to be able to qualify for a loan to buy a median-priced U.S. home, notes Lisa Sturtevant, chief economist at Bright MLS.
Elevated mortgage rates are also discouraging many homeowners who locked in mortgage rates well below where they are now from selling.

Conclusion

The trends point to the U.S. housing market remaining in the doldrums this year.
“What does this mean for the housing market in the second half of 2025? It is likely going to continue to be a slow market,” Sturtevant said.
Originally Published: July 17, 2025 at 12:10 PM EDT

FAQs

1. What is the current average rate on a 30-year U.S. mortgage?
   • The current average rate on a 30-year U.S. mortgage is 6.75%.
2. How have mortgage rates influenced the U.S. housing market?
   • Rising mortgage rates have contributed to a sales slump in the U.S. housing market by increasing borrowing costs and reducing purchasing power for potential homebuyers.
3. What factors influence mortgage rates?
   • Mortgage rates are influenced by the Federal Reserve’s interest rate policy decisions, bond market investors’ expectations for the economy and inflation, and the 10-year Treasury yield.
4. What are the projections for mortgage rates in the coming months?
   • Economists expect mortgage rates to remain relatively stable, with forecasts indicating the average rate on a 30-year mortgage will stay between 6% and 7% for the year.
5. How do elevated mortgage rates affect homebuyers and homeowners?
   • Elevated mortgage rates discourage potential homebuyers due to higher costs and reduced purchasing power. They also discourage homeowners who have locked in lower rates from selling their homes.