Mortgage rates climbed to their highest levels in more than a year, as recent turmoil in the bond market spreads, putting pressure on consumers already struggling with persistent inflation and compounding the affordable housing crisis in the United States.
The 30-year fixed-rate mortgage, the most common home loan in the United States, hit 6.71 percent, the mortgage finance giant Freddie Mac said Thursday, up from 6.66 percent the week before and the highest since July 2025.
The U.S. housing market has essentially been stuck for the past several years, squeezed between high prices and high mortgage rates. Jonathan Miller, a real estate appraiser and consultant, said mortgage rates had ascended at their steepest pace in history. Rates are now double what they were during the Covid-19 pandemic.
Many homeowners at that time were able to secure mortgage rates below 3 percent, which unlock enormous reductions on their monthly payments. Moving to a new home could double their mortgage rates, a significant jump in expenses. Homeowners are staying put much longer than they otherwise might because they want to keep their low rates.
Rising home prices are another factor putting a damper on the housing market. Prices increased 1.5 percent annually in June, up from 1.2 percent growth the previous month, according to Cotality, a housing market data provider.
“They’re rising because in large regions of the country, there just isn’t enough inventory,” Mr. Miller said.
Mortgage rates are closely tied to 10-year Treasury bonds, and yields on those notes have been climbing amid investor concerns about government deficits and elevated inflation. The problem stretches beyond the United States: This week, a global sell-off in bonds intensified as investors demanded higher returns in exchange for holding government debt.
The sell-off has been fed by a number of factors. The world’s richest nations have been borrowing vast sums of money, and investors worry that governments are not prepared to take steps to address their ballooning deficits. These fears are compounded by the growing cost of debt that is a result of a surge in borrowing by technology companies building artificial intelligence systems. The war in Iran, with its accompanying rise in oil prices, has been a challenge for the global economy as well, increasing concerns about persistently high inflation.
This week, bond yields in some countries, including Germany, Britain and Japan, hit their highest levels in years.
