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Latest mortgage news: Rates pushing toward 7%

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The average rate on 30-year mortgages rose to 6.73 percent this week from 6.35 percent the previous week, according to Bankrate’s national survey of large lenders.

It was the highest reading for mortgage rates since 2008, and further evidence of the end of the decade-long period of low rates that followed the Great Recession. The Federal Reserve has been moving aggressively to control inflation, and its third consecutive rate hike of three-quarters of a percentage point last week would seem to create upward longer-term pressure on mortgage rates.

“Only when inflation calms down will we see mortgage rates begin to steady,” said Lawrence Yun, chief economist for the National Association of Realtors.

The Fed doesn’t directly control fixed mortgage rates; the most pertinent number is the 10-year Treasury yield, which has bounced around in recent weeks.

A year ago, the benchmark 30-year fixed-rate mortgage was 3.17 percent. Four weeks ago, the rate was 5.78 percent. The 30-year fixed-rate average for this week is 3.6 percentage points higher than the 52-week low of 3.17 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.32 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 4.62 percent.

Where mortgage rates are headed

Housing economists see rates rising as the Fed makes its stand, but the question is how much.

“Inflation fears are driving the yield on 10-year Treasurys straight up,” says Ken H. Johnson, a real estate economist at Florida Atlantic University.

Not everyone predicts rates will stay at these lofty levels, however. “After running up a full percentage point in the past 30 days, mortgage rates will take a little breather,” says Greg McBride, Bankrate’s chief financial analyst.

Economists had expected rates to rise by the end of 2022, but not as quickly as has been the case since the Fed started battling inflation in earnest. As mortgage rates sailed past the 6 percent barrier, competition among homebuyers could ease further, though the jump in rates is also squeezing affordability. The national median family income for 2022 is $90,000, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in August was $389,500, according to the National Association of Realtors. Based on a 20 percent down payment and a mortgage rate of 6.73 percent, the monthly payment of $2,017 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 just 3.03 percent. Buying the typical home then required just 19 percent of a family’s monthly income.


The 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 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.

Written by
Jeff Ostrowski
Senior mortgage reporter
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.
Edited by
Mortgage editor