FX.co ★ US Mortgage Rates Rise to Highest Level Since May 2025

The average contract rate on a 30-year fixed mortgage in the US climbed to 6.97% in the week ended September 11, its highest level since May 2025, according to the Mortgage Bankers Association. The move tracked a rise in Treasury yields, with the 10-year note briefly touching 5% and nearing its highest level since 2007. Renewed tensions in the Middle East and stronger-than-expected US inflation data have intensified inflation worries and bolstered expectations that the Federal Reserve will deliver its first rate hike since 2023 on September 16. Since the US and Israel began strikes against Iran in late February, mortgage rates have increased by 88 basis points. At the same time, total mortgage applications declined 4.1%, extending a 2.7% drop the previous week and marking the sharpest weekly fall since July. Refinancing applications slid 8.8%, while purchase applications edged down 0.8%.