The average long-term mortgage rate in the U.S. has increased for the fourth week in a row, reaching its highest point this year. This marks a challenge for prospective buyers looking for relief from steep borrowing expenses. According to Freddie Mac, the 30-year fixed-rate mortgage rose to 6.66% from 6.58% last week. One year ago, the rate stood at 6.72%.

Higher rates can add substantial monthly costs for borrowers, reducing their purchasing capability. As a result, some potential buyers might postpone their home purchases. This contributes to the sluggish home sales seen this year.

The cost of 15-year fixed-rate mortgages, favored by those refinancing, also rose. The average rate increased to 6.04% from 5.96% last week. Last year, the rate was 5.85%, as noted by Freddie Mac.

Mortgage rates are affected by various elements, including the Federal Reserve’s interest rate decisions and bond market expectations regarding the economy and inflation. These rates generally align with the trajectory of the 10-year Treasury yield, which lenders use to price home loans.

This year, rates have mostly risen due to the conflict in Iran, which drove oil prices up and fueled inflation expectations. This increased long-term bond yields compared to pre-conflict levels, pushing mortgage rates higher.

The 10-year Treasury yield reached 4.66% by Thursday midday on the bond market, up from 3.97% prior to the outbreak of war in late February.

The average 30-year mortgage rate is now higher than it has been since July 31, 2025, when it was 6.72%. At its lowest, the rate briefly fell below 6% earlier this year.

The latest rate rise follows the Federal Reserve’s decision not to alter its key interest rate, as it grapples with continued high inflation. Although not directly setting mortgage rates, the Fed’s rate adjustments influence bond investors and can impact the 10-year Treasury yield.

While mortgage rates remain below last year’s figures, their rise has slowed home sales. Seasonally adjusted sales of previously occupied homes increased 0.7% from January to June compared to last year, but they are still near a 4-million annual pace, below the typical 5.2-million norm.

This trend perpetuates the national housing market downturn that started in 2022, concurrent with rising rates from pandemic lows. Last year, sales stayed at a 30-year low.