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Trump: Interest rates should be 1% or less
The Federal Reserve raised its benchmark interest rate by a quarter-point, bringing the target range to 3.75% to 4.00%. President Trump says interest rates should be 1%, or less. LiveNOW’s Andy Mac spoke about the Fed’s decision, and Trump’s reaction, with Heather Long from Navy Federal.
NEW YORK - The average long-term U.S. mortgage rate has jumped this week to its highest level in nearly three years.
US mortgage rate hits 7.28%
By the numbers:
According to mortgage buyer Freddie Mac, the benchmark 30-year fixed-rate mortgage rose to 7.28% from 7.03% – the biggest leap in four years. A year ago, the average rate was 6.34%.
It is the sixth consecutive week that mortgage rates have increased.
The average 30-year fixed mortgage rate jumped to 7.28% from 7.03%, its highest level since November 2023. (Credit: PATRICK T. FALLON/AFP via Getty Images)
The average rate is now the highest it’s been since Nov. 22, 2023, when it reached 7.29%, and it’s not climbed this fast week-to-week since October 2022.
Borrowing costs on 15-year fixed-rate mortgages also climbed this week. That average rate increased to 6.60% from 6.42% last week. A year ago, it was at 5.55%.
Mortgage rates continue to surge
The backstory:
Last month, the 30-year mortgage rate crossed 7% for the first time since the first week of President Donald Trump's current term, Reuters reported.
Mortgage rates rose more than a full percentage point since joint U.S.-Israeli strikes against Iran prompted a rise in oil prices in late February. Higher gas prices helped slow the housing market as prospective homebuyers worried about expenses.
In late February, the average rate on a 30-year mortgage briefly dipped to 5.98%, its lowest level going back to late 2022. The roughly 1.3-percentage-point increase from the late-February low has been estimated to add about $276 a month to payments on a $400,000 mortgage.
Sam Khater, the chief economist for Freddie Mac, told FOX Business last month that purchase demand has remained relatively stable, which Khater said indicates "steady interest from buyers adapting to evolving market conditions."
Last month the National Association of Realtors said that existing home sales fell 2% in August from July to a seasonally adjusted annual rate of 3.98 million units. That was their slowest annual pace in more than a year.
Higher mortgage rates can mean higher monthly payments
Why you should care:
Higher mortgage rates can add hundreds of dollars a month to borrowers’ costs, limiting homebuyers’ purchasing power. As rates rise, that can also lead prospective home shoppers to delay buying.
EARLIER: 30-year mortgage rates hit 2-year high: What homebuyers need to know
Mortgage rates are influenced by inflation, Federal Reserve policy and bond-market investors’ expectations for the economy, among other factors. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The Source: This story was reported from Los Angeles. The Associated Press, previous FOX Local reporting contributed.