Summary
Freddie Mac's 30-year fixed mortgage rate jumped 19 basis points to 6.95% on Sept. 17, the highest reading since January 2025. The 15-year rate rose to 6.26%. The increase lands one day after the Federal Reserve raised its benchmark rate and adds fresh affordability pressure to an already weak housing market.
Mortgage rates moved sharply higher this week, pushing the housing market back to the edge of the 7% threshold just as buyers and builders were already confronting renewed pressure from borrowing costs.
The average rate on a 30-year fixed mortgage rose to 6.95% as of Sept. 17, up 19 basis points from 6.76% a week earlier, according to Freddie Mac’s Primary Mortgage Market Survey. Reuters reported that the new reading is the highest since January 2025.
A year ago, the same Freddie Mac benchmark stood at 6.26%. The 15-year fixed mortgage also moved higher, averaging 6.26%, compared with 6.09% last week and 5.41% one year ago.
“The 30-year fixed-rate mortgage continues to fluctuate as markets assess economic data,” Freddie Mac Chief Economist Sam Khater said in the company’s Sept. 17 release.
The move is consequential for a housing market already struggling to regain transaction volume. A 19-basis-point weekly increase changes the monthly payment on a newly originated loan immediately, while the year-over-year gap in Freddie Mac’s benchmark is now 69 basis points.
For illustration, on a $400,000 30-year fixed loan, principal and interest at 6.95% is roughly $2,648 per month, compared with about $2,596 at 6.76%—a difference of roughly $52 a month before taxes and insurance. Actual borrower rates and payments vary with credit, down payment, points, loan type and other factors.
The latest reading follows the Federal Reserve’s Sept. 16 decision to raise its federal funds target range by 25 basis points to 3.75% to 4.00%, its first increase since 2023. Mortgage rates do not move mechanically with the federal funds rate; they are more closely tied to expectations for inflation, economic growth and longer-term bond yields. But the Fed’s return to tightening has reinforced the market’s focus on inflation and the path of long-term interest rates.
The benchmark 10-year Treasury yield has recently hovered around 5%, adding pressure to mortgage pricing. That backdrop is already showing up elsewhere in housing. Builder sentiment has weakened, mortgage application activity has come under pressure and major builders are leaning heavily on incentives and rate buydowns to move inventory.
Freddie Mac’s weekly survey is a benchmark rather than a universal consumer quote. The PMMS focuses on conventional, conforming, fully amortizing purchase loans for borrowers with excellent credit who make a 20% down payment. Individual borrowers can receive materially different rates.
Still, Thursday’s increase is an important marker. The weekly Freddie Mac average has returned to a level last seen in early 2025, erasing much of the affordability relief buyers had hoped would develop this year. With the Fed now tightening rather than easing, the direction of Treasury yields and inflation data will remain central to whether mortgage rates hold near 7% or move decisively through it.
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