Stories
US 30-Year Mortgage Rate Soars to 7.12%, Highest in Two Years
N
News18•23-09-2026, 19:15
US 30-Year Mortgage Rate Soars to 7.12%, Highest in Two Years
- •The average US fixed 30-year mortgage rate climbed to 7.12%, marking its highest level in over two years, driven by Federal Reserve rate hikes and rising oil prices.
- •Data from the Mortgage Bankers Association showed the rate increased by 15 basis points to 7.12% for the week ending September 18, with the last higher rate recorded in May 2024.
- •Mortgage rates have risen by more than a full percentage point since late February, influenced by geopolitical events impacting energy markets.
- •Federal policymakers recently raised the benchmark rate by 25 basis points to a range of 3.75% to 4.00% to combat persistent inflation, which remains above the 2% target.
- •The surge in mortgage rates has led to a decline in refinancing and home purchase applications, pushing borrowers towards adjustable-rate mortgages for lower upfront costs.
Key Questions Answered
The US 30-year mortgage rate surged due to a short-term policy interest rate hike by the Federal Reserve to curb persistent inflation, alongside rising oil prices that drove up residential borrowing benchmarks and Treasury yields.
The rise in borrowing costs led to a decline in refinancing and home purchase applications. Consequently, more borrowers shifted toward adjustable-rate mortgages to manage lower upfront costs, accounting for 9.8% of total mortgage applications.
Federal policymakers raised the benchmark rate by 25 basis points to a range between 3.75% and 4.00% to steer inflation onto a timelier path toward the official 2% target.
