US mortgage rates rise for a third consecutive week, pushing the average 30-year fixed loan to its highest level in more than 14 months, as existing home sales fell for the third month running, data published Thursday showed.
The benchmark 30-year fixed rate climbed to 6.76% from 6.71% the previous week, mortgage buyer Freddie Mac said. A year ago, the same rate stood at 6.35%. The last time it was higher was 26 June 2025, when it hit 6.77%.
The 15-year fixed rate, popular with homeowners refinancing existing loans, also edged up, rising to 6.09% from 6.04% a week earlier. A year ago it averaged 5.5%.
Home sales fall to slowest pace in over a year
Sales of previously occupied US homes dropped 2% in August from July to a seasonally adjusted annual rate of 3.98 million units, the National Association of Realtors said. That is the third straight monthly decline. Sales were also 1.2% below the same month last year.
The tally came in just short of the 4 million pace economists had forecast, according to FactSet.
Higher mortgage rates add hundreds of dollars a month to borrowing costs, squeezing purchasing power and prompting many would-be buyers to hold off. Home sales have remained largely stagnant as a result.
Fed rate cut adds little relief as US mortgage rates rise further
The rate increases come even as the Federal Reserve’s rate decision in September moved in the opposite direction. The Fed voted unanimously to lower its target range for the federal funds rate by half a percentage point to 4¾ to 5%, effective 19 September 2024. A separate Federal Reserve board vote also cut the rate paid on reserve balances to 4.9% on the same date. Mortgage rates, which track longer-term bond yields rather than the Fed’s overnight rate, have nonetheless continued to climb.
Inflation and fuel costs compound the squeeze
The housing slowdown sits inside a broader picture of stubborn price pressures. The consumer price index rose 3.4% in August compared with a year earlier, the Labor Department said Friday, matching July’s annual rate but with monthly inflation accelerating to 0.4% from just 0.1% the previous month.
Diesel prices hit a fresh record of $6.05 a gallon on average, up from $5.85 the previous week and $3.70 a year ago, motor club AAA reported. Renewed fighting in the Middle East and the ongoing US conflict with Iran have disrupted global fuel supplies.
Wholesale prices reflected similar pressures. The producer price index rose 5.4% in August from a year ago, up from 4.8% in July, the Labor Department said Thursday. On a monthly basis, wholesale prices rose 0.4% from July to August.
US oil prices topped $100 a barrel during the week on fresh Middle East tensions, before easing. Brent crude, the international benchmark, fell 3% to $104.42 on Friday after approaching $110 overnight, helping US equities recover some ground. The S&P 500 rose on Friday, ending a four-day losing streak.
On the labour market, unemployment claims dipped to 206,000 last week from a revised 207,000 the week before, the Labor Department reported Thursday, keeping jobless filings within their recent historically low range.
The National Association of Realtors is due to release September home sales figures next month, which will show whether climbing borrowing costs are deepening the market’s slowdown.
