US mortgage rates near 7%, highest since Trump took office

US mortgage rates rose for a fourth consecutive week, reaching their highest level since President Donald Trump began his second term in office.

The average rate on a 30-year fixed mortgage climbed to 6.95% this week, up 0.19 percentage points from the previous week, according to Freddie Mac, the government-sponsored mortgage company. The weekly gain was the largest in 16 months.

Approaching the 7% threshold, the rate is now the highest since January last year, shortly after Trump began his second term.

Mortgage rates had been falling earlier this year, briefly dipping below 6% in February for the first time in three years. Since then, however, they have climbed sharply as rising global oil prices tied to the outbreak of war with Iran, growing inflationary pressure and concerns over US government fiscal spending have converged.

The yield on the 10-year US Treasury note — widely used as a benchmark for mortgage rates — broke through the psychologically significant 5% level this week. As a result, a homebuyer taking out a 30-year mortgage at the current rate rather than the roughly 6% rate available earlier this year could end up paying tens of thousands of dollars more over the life of the loan.

The Federal Reserve's decision Thursday to raise its benchmark interest rate by 0.25 percentage points to combat inflation could add further near-term pressure on borrowing costs for homebuyers. However, analysts say that if the rate increase succeeds in bringing inflation under control, it could help push mortgage rates lower over the longer term.

"Today's higher benchmark rate is the medicine needed for tomorrow's housing market recovery," said Misha Fischer, chief economist at real estate data firm Zillow. "The more market confidence grows that inflation is being brought under control, the more likely mortgage rates are to fall and the housing market recovery is to get back on track."