US Mortgage Rates Surge to 7.2%, Stalling Housing Market

U.S. mortgage rates have surged to an average of 7.2% for a 30-year fixed loan, reaching their highest level since November 2025, according to Freddie Mac . This sharp increase from 6.8% the previous week follows stronger-than-expected economic data, signaling the Federal Reserve may maintain higher interest rates for longer. The yield on the 10-year Treasury note has also spiked, driving the rate increase . Homebuyer demand is weakening as a result. The Mortgage Bankers Association reported that purchase applications fell 5% week-over-week to their lowest level since February, while refinance applications dropped 15% . The National Association of Realtors (NAR) confirmed housing market stress, with its pending home sales index falling to 71.2 in July, the lowest reading for the year and the second-lowest since 2001 . Combined with persistently high home prices, the jump in borrowing costs is creating severe affordability challenges and stalling the U.S. housing market.