Mortgage Rates Rocket Above 7% Just Months After Falling Below 6%

American homebuyers are facing sharply higher borrowing costs after a widely watched mortgage rate measure surged above 7% Tuesday, reversing much of the relief borrowers saw earlier in 2026.

The average 30-year fixed mortgage rate reached 7.22% Tuesday, up from 7.17% Monday and hitting a 52-week high, according to Mortgage News Daily. The surge comes less than seven months after Freddie Mac’s benchmark 30-year rate fell below 6% for the first time in more than three years.

Freddie Mac’s 30-year fixed rate fell to 5.98% on Feb. 26, its lowest level of 2026, before steadily climbing to 6.76% as of Sept. 10, according to the mortgage giant’s data. Mortgage News Daily’s more frequently updated daily measure has since climbed further, reaching 7.22% Tuesday.

The increase translates into a substantial hit for prospective buyers. A $500,000, 30-year mortgage at 5.98% carries a principal-and-interest payment of roughly $2,990 per month, while the same loan at 7.22% costs roughly $3,400 per month — an increase of about $410 per month, or nearly $5,000 per year.

The rapid increase has accompanied a selloff in U.S. government debt, with the 10-year Treasury yield crossing 5% Monday as investors confronted higher oil prices, persistent inflation and the prospect of additional Federal Reserve interest-rate hikes. The 10-year Treasury serves as a key benchmark for borrowing costs throughout the economy and heavily influences mortgage rates.

Mortgage rates have risen sharply as Treasury yields climbed amid the ongoing Middle East conflict, which has pushed oil prices higher and fueled concerns that inflation could remain elevated, Reuters reported Tuesday. A Reuters poll of property experts found mortgage rates are now expected to remain higher than previously forecast and decline only modestly over the coming quarters.

The increase in borrowing costs has already weighed on housing demand. Mortgage applications fell 2.7% during the week ending Sept. 4 as the Mortgage Bankers Association’s measure of the 30-year fixed rate climbed to 6.85%, its highest level since June 2025.

The housing market was already struggling with affordability before the latest rate surge. U.S. construction spending fell to its lowest level in nearly three years in July as elevated mortgage rates weighed on single-family homebuilding.