With the U.S. economy still strong and a political crisis looming, mortgage rates increased again this week. The average interest rate on 30-year mortgages rose to 6.84 percent, up from 6.66 percent last week, according to Bankrate’s national survey of large lenders.

“Investors remained attuned to the uncertainty around the U.S. debt ceiling and communication from several Federal Reserve officials last week, which sent Treasury yields higher, along with mortgage rates,” says Joel Kan, deputy chief economist at the Mortgage Bankers Association. “Economic data released over the past week have also pointed to a still-resilient economy.”

The Fed has been acting aggressively to control inflation, raising rates at 10 consecutive meetings dating to early 2022. Those moves, including this month’s announcement of a widely expected increase of a quarter point, have created upward pressure on rates while also intensifying the risk of a recession.

While its policy guides the mortgage market, the Fed doesn’t directly set fixed mortgage rates. The most relevant benchmark is the 10-year Treasury yield, which has bounced around in recent weeks.

Mortgage rates don’t take direct cues from the Fed and will instead respond to the outlook for the economy and inflation. A slowing economy and an easing of inflation pressures are the prerequisites for lower mortgage rates. — Greg McBride, Bankrate Chief Financial Analyst

The Labor Department said last week that inflation cooled to 4.9 percent in April, its lowest level since 2021. For now, though, mortgage rates keep climbing

Mortgage rates rose steeply for most of 2022, topping 7 percent in November. They retreated from that autumn peak, but they remain well above their 2021 lows of less than 3 percent.

What happened to mortgage rates this week

The 30-year fixed mortgages in this week’s survey had an average total of 0.4 discount and origination points.

Over the past 52 weeks, the benchmark 30-year fixed-rate mortgage has averaged 6.36 percent. A year ago, the 30-year fixed-rate mortgage was 5.27 percent. Four weeks ago, the rate was 6.48 percent. The 30-year fixed-rate average for this week is 1.57 percentage points higher than the 52-week low of 5.27 percent.

As for other loans:

How mortgage rates affect home affordability

The national median family income for 2022 was $90,000, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in April 2023 was $388,800, according to the National Association of Realtors. Based on a 20 percent down payment and a mortgage rate of 6.84 percent, the monthly payment of $2,036 amounts to 27 percent of the typical family’s monthly income.

A year ago, median family income was $79,900, the median home price was $364,600 and the average mortgage rate was 3.4 percent. Buying the typical home then required just 19 percent of a family’s monthly income.

Where mortgage rates are headed

Experts expected to see rates decrease by the end of 2023 as the Fed’s round of rate hikes draws to an end, but the resilience of the U.S. economy is throwing a wrinkle into those expectations. So is the ongoing political showdown over the federal debt ceiling.

“Uncertainty over a possible government shutdown continues and will put upward pressure on all rates,” says Ken H. Johnson, a housing economist at Florida Atlantic University.

A quick drop in mortgage rates could spur demand and bring back an intense seller’s market characterized by stiff competition and bidding wars among buyers.

“We continue to expect that mortgage rates will drift down over the course of the year as the economy slows, as we move closer to the Fed lowering rates beginning in 2024, and as financial market volatility finally begins to settle down,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Mortgage rates typically move in lockstep with the 10-year Treasury. The average rate on a 30-year loan is usually 1.5 to 2 percentage points above the 10-year rate. In the turbulent times of 2022, however, that gap — known as the “spread” — widened to more than 3 percentage points.


The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types — thrifts, credit unions, commercial banks and mortgage lending companies — is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.