The 30-year fixed-rate mortgage is a stone’s throw away from reaching a 7% average. Monthly mortgage payments have jumped nearly $300 in the last year.
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Mortgage rates were back on the rise this week, averaging 6.96%, Freddie Mac reports. For home buyers, the rate jump is translating to an average monthly payment of $2,126 for the typical single-family home. Higher rates have pushed the typical monthly mortgage payment up more than $280, says Jessica Lautz, deputy chief economist and vice president of research at the National Association of REALTORS®.

Mortgage rates have surged to their highest level since November 2022, when they broke 7%, says Sam Khater, Freddie Mac’s chief economist. “Incoming data suggest that inflation is softening, falling to its lowest annual rate in more than two years,” he adds. “However, increases in housing costs, which account for a large share of inflation, remain stubbornly high, mainly due to low inventory relative to demand.”

The latest inflation data offers a glimmer of hope that lower mortgage rates could occur later this year, Lautz says. In June, inflation saw its smallest gain in more than two years, and consumers are noticing moderating prices for gasoline, energy and healthcare services.

Lower inflation also may enable aspiring home buyers to save more for a down payment. “It may be easier today to save and pay down existing debt than it has been in the last year,” Lautz says. “Energy prices dropped, meaning a summer road trip could still happen even while saving for a new home.”

Despite the recent uptick in rates, mortgage applications for home purchases are rising. But they’re still down 26% from a year ago, the Mortgage Bankers Association reports. “The rise in purchase activity was driven by increases in both FHA and VA purchase applications,” says Joel Kan, deputy chief economist at MBA. Both types of loans offer low down payment options. 

“Going forward, we can expect rates to continue paying a tremendous amount of attention to incoming economic data,” Matthew Graham, chief operating officer at Mortgage News Daily, told®. “Traders are on the edge of their seats, waiting for evidence that the economy and inflation are finally cooling off in a meaningful way. When it happens, we should see a reasonably swift move back toward more livable rates.”

Freddie Mac reports the following national averages with mortgage rates for the week ending July 13:

  • 30-year fixed-rate mortgages: averaged 6.96%, up from last week’s 6.81% average. A year ago, 30-year rates averaged 5.51%.
  • 15-year fixed-rate mortgages: averaged 6.3%, up from last week’s 6.24% average. A year ago, 15-year rates averaged 4.67%.