Average rate on a US 30-year mortgage rises to 6.89%, its highest level
since early February
[May 30, 2025] By
ALEX VEIGA
The average rate on a 30-year mortgage in the U.S. rose this week to its
highest level since early February, further pushing up borrowing costs
for homebuyers.
The rate increased to 6.89% from 6.86% last week, mortgage buyer Freddie
Mac said Thursday. A year ago, the rate averaged 7.03%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners
refinancing their home loans, also rose. The average rate ticked up to
6.03% from 6.01% last week. It’s still down from 6.36% a year ago,
Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal
Reserve’s interest rate policy decisions to bond market investors’
expectations for the economy and inflation. The key barometer is the
10-year Treasury yield, which lenders use as a guide to pricing home
loans.
Bond yields have been trending higher, reflecting bond market investors’
uncertainty over the Trump administration’s ever-changing tariffs policy
and worry over exploding federal government debt.
The 10-year Treasury yield was 4.43% in midday trading Thursday, down
from 4.47% late Wednesday.
The average rate on a 30-year mortgage has remained relatively close to
its high so far this year of just above 7%, set in mid-January. The
average rate’s low point so far was six weeks ago, when it briefly
dropped to 6.62%. After rising for three straight weeks, the average
rate is now at its highest level since Feb. 6, when it averaged 6.89%.
High mortgage rates, which can add hundreds of dollars a month in costs
for borrowers, have reduced purchasing power for many prospective
homebuyers this year. That’s helped keep the U.S. housing market in a
sales slump that dates back to 2022, when mortgage rates began to climb
from the rock-bottom lows they reached during the pandemic.
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A for sale sign stands outside a residence in Niles, Ill., Monday,
July 1, 2024. (AP Photo/Nam Y. Huh, File)
 Last year, sales of previously
occupied U.S. homes sank to their lowest level in nearly 30 years.
Sales fell last month to the slowest pace for the month of April
going back to 2009.
Rising mortgage rates have helped dampen sales during what’s
traditionally the peak period of the year for home sales. Mortgage
applications fell 1.2% last week from a week earlier as home loan
borrowing costs rose, according to the Mortgage Bankers Association.
Applications for a loan to buy a home were up 18% from a year
earlier.
New data suggest sales could slow further in coming months. An index
of pending U.S. home sales fell 6.3% last month from March and
declined 2.5% from April last year, the National Association of
Realtors said Thursday.
There’s usually a month or two lag between a contract signing and
when the sale is finalized, which makes pending home sales a
bellwether for future completed home sales.
“At this critical stage of the housing market, it is all about
mortgage rates,” said Lawrence Yun, NAR’s chief economist. “Despite
an increase in housing inventory, we are not seeing higher home
sales. Lower mortgage rates are essential to bring home buyers back
into the housing market.”
Economists expect mortgage rates to remain volatile in coming
months, with forecasts calling for the average rate on a 30-year
mortgage to range between 6% and 7% this year.
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