US 30-year mortgage rates soar to 7%! Real estate market woes intensify

The U.S. housing market is facing severe interest rate pressures.

According to Mortgage News Daily, the average 30-year fixed mortgage rate in the U.S. rose to 7.24% on September 16, a substantial increase of 27 basis points from 6.97% a week earlier. On September 17, this rate edged down slightly to 7.19%, but remained significantly above the 7% mark.

Meanwhile, data released by Freddie Mac on Thursday showed that for the week ending September 17, the average 30-year fixed mortgage rate in the U.S. rose to 6.95%, up 19 basis points from 6.76% the previous week, reaching its highest level since January 2025.

Freddie Mac publishes survey data weekly, while Mortgage News Daily’s data more closely follows daily transactions, so there are differences in sampling frequency and timeliness between the two sources.

Analysis indicates that mortgage rates around 7% have already significantly eroded housing affordability; in July, the cost of housing in the U.S. accounted for 44% of a typical family’s income—well above the generally recognized affordable level of 30%.

According to a previous article from Wallstreetcn, U.S. existing home sales in August fell 2% month-on-month, reaching the lowest level in more than a year, and the days on market reached a ten-year high.

Long-term U.S. Treasury yields remain the key variable

U.S. mortgage rates are closely tied to long-term U.S. Treasury yields.

On Wednesday, the Federal Reserve raised its benchmark interest rate by 25 basis points, marking the first rate hike since July 2023. On Thursday, U.S. Treasury yields fell slightly compared to Wednesday but remained elevated. As of writing, the 10-year U.S. Treasury yield stood at 4.94%, and the 30-year yield was at 5.29%.

U.S. federal debt has surpassed $40 trillion; AI capital spending is driving corporations to issue large amounts of bonds, leading to increased competition for capital, and high oil prices are pushing inflation expectations higher and for longer—these structural factors are collectively driving long-term rates upward.

On one hand, higher monthly payments directly weaken the desire to purchase homes; on the other, existing homeowners who refinanced at less than half of current mortgage rates a few years ago face the dilemma of "selling loses low-interest loans," making them more inclined to stay put.

Currently, U.S. housing prices remain at high levels and mortgage rates are elevated. Existing homeowners face the dilemma of "selling loses low-interest loans," resulting in weak willingness to sell. The housing market is facing dual pressures of "unaffordable to buy and unable to sell."