US mortgage rates have climbed back above 7% for the first time this cycle, adding fresh pressure on homebuyers even as new-home sales proved surprisingly resilient in August.
The numbers
The 30-year fixed mortgage average reached 7.03% in the week to September 24, according to Freddie Mac data, up from 6.71% just three weeks earlier. Tracking the bond market closely, the move followed the 10-year Treasury yield climbing to 5.18% on September 24.
The cost difference is stark: a $400,000 loan costs about $2,672 a month at 7.03%, compared with about $2,393 at the year's low of 5.98%.
New homes vs. resale
Sales of new single-family homes still ran at an annual pace of 684,000 in August, up 6.4% from July, the Census Bureau reported — though 2.0% below a year earlier. The median new-home price fell 5.8% from a year earlier to $393,700, with 8.5 months of supply on the market. Builders are discounting and funding rate buydowns to keep buyers coming.
The resale market tells a different story: existing-home sales slipped 2.0% to an annual 3.98 million, while the median resale price rose 1.6% to $429,100, according to the realtors' association.
The Fed's view
Speaking in Chicago on September 23, Federal Reserve Governor Michael Barr called affordability the worst in decades. One affordability index fell to 68 in July 2026, its lowest level in 21 years. He pointed to a housing shortfall of roughly 2 to 5.5 million units, restrictive zoning, and weak construction productivity as root causes — and argued the path back to affordability runs through lower inflation rather than housing policy alone.
Sources: Catenaa: Mortgage rates top 7% as new home sales rise
The numbers
The 30-year fixed mortgage average reached 7.03% in the week to September 24, according to Freddie Mac data, up from 6.71% just three weeks earlier. Tracking the bond market closely, the move followed the 10-year Treasury yield climbing to 5.18% on September 24.
The cost difference is stark: a $400,000 loan costs about $2,672 a month at 7.03%, compared with about $2,393 at the year's low of 5.98%.
New homes vs. resale
Sales of new single-family homes still ran at an annual pace of 684,000 in August, up 6.4% from July, the Census Bureau reported — though 2.0% below a year earlier. The median new-home price fell 5.8% from a year earlier to $393,700, with 8.5 months of supply on the market. Builders are discounting and funding rate buydowns to keep buyers coming.
The resale market tells a different story: existing-home sales slipped 2.0% to an annual 3.98 million, while the median resale price rose 1.6% to $429,100, according to the realtors' association.
The Fed's view
Speaking in Chicago on September 23, Federal Reserve Governor Michael Barr called affordability the worst in decades. One affordability index fell to 68 in July 2026, its lowest level in 21 years. He pointed to a housing shortfall of roughly 2 to 5.5 million units, restrictive zoning, and weak construction productivity as root causes — and argued the path back to affordability runs through lower inflation rather than housing policy alone.
Sources: Catenaa: Mortgage rates top 7% as new home sales rise