30-Year Mortgage Rate Edges Higher 6.3% After Recent Decline/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The average U.S. 30-year mortgage rate rose to 6.3%, ending a four-week slide that had brought borrowing costs to their lowest level in nearly a year. Rates followed Treasury yields upward after Fed Chair Jerome Powell signaled a cautious stance on further rate cuts. Despite the increase, mortgage rates remain near 11-month lows, fueling refinancing activity.
Mortgage Rates Update Quick Looks
- 30-Year Rate: Climbed to 6.3% from last week’s 6.26%.
- 15-Year Rate: Increased to 5.49% from 5.41%.
- Year-Ago Comparison: 30-year averaged 6.08%, 15-year was 5.16%.
- Fed Influence: Powell urged caution on future cuts despite Trump appointees pushing faster easing.
- Treasury Yields: 10-year yield up to 4.19%, guiding rate increases.
- Market Slump: Home sales still near 30-year lows.
- Refinancing Surge: Over 60% of mortgage applications last week were refis.
- Historical Parallel: Pattern mirrors 2024, when rates rebounded after a Fed cut.
- Housing Pressure: Rates above 6% still deter many potential buyers.
- Outlook: Economists expect mortgage rates to hover in mid-6% range.
Deep Look: U.S. Mortgage Rates Rise Slightly After Fed’s Mixed Signals
The U.S. housing market faced another shift this week as the average 30-year mortgage rate inched up to 6.3%, ending a four-week streak of declines that had lowered borrowing costs to their lowest point in nearly a year.
According to Freddie Mac, the new average is a modest rise from last week’s 6.26% and above the 6.08% recorded at the same time last year. The popular 15-year fixed mortgage rate also rose, climbing to 5.49% from 5.41%.
Why Rates Rose
Mortgage rates are closely linked to the 10-year Treasury yield, which serves as a benchmark for lenders. On Thursday, the yield reached 4.19%, up from 4.16% a day earlier, reflecting investor adjustments to shifting Federal Reserve signals.
Last week, the Fed cut its benchmark rate for the first time in a year to address concerns about the job market. But this week, Chair Jerome Powell suggested a measured approach to future cuts, dampening expectations among traders. By contrast, Fed policymakers appointed by President Donald Trump have pushed for faster rate reductions.
This divergence has unsettled bond markets, nudging yields—and therefore mortgage rates—slightly higher.
A Familiar Pattern
Economists note that today’s environment echoes September 2024, when mortgage rates initially fell ahead of a Fed cut but later rebounded. Within months, rates climbed back above 7%, weighing heavily on homebuyers.
The housing market has been in a prolonged slump since 2022, when mortgage rates began rising sharply from historic lows. Existing-home sales fell last year to their lowest point in nearly three decades, and 2025 sales remain weaker than 2024.
Refinancing Still Active
Despite the uptick, current rates are still near 11-month lows, encouraging refinancing. Data from the Mortgage Bankers Association (MBA) showed overall mortgage applications up 0.6% last week, with refinancing loans accounting for more than 60% of the total.
“Even with this week’s uptick, mortgage rates remain near 11-month lows, creating opportunities for both buyers and homeowners considering a refinance,” said Hannah Jones, senior economic research analyst at Realtor.com.
Still, most homeowners remain locked into lower rates. Realtor.com estimates that 81% of U.S. mortgage holders currently pay 6% or less, limiting the appeal of refinancing unless rates fall significantly below that threshold.
Housing Market Outlook
Economists predict mortgage rates will likely hold in the mid-6% range through the rest of 2025. While lower than peak levels, such rates continue to challenge affordability, especially after years of rapid home price increases.
If rates fail to dip meaningfully below 6%, experts warn the housing market could remain sluggish, with affordability constraints sidelining many buyers. Yet refinancing activity may provide some relief for recent homeowners looking to reduce payments.
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