US mortgage rates top 7% for first time in 20 months

Increase comes after Fed decision to raise interest rates, as Americans struggle with high prices and stagnant wages

US mortgage rates surpassed 7% for the first time since January 2025, according to federal lender Freddie Mac, aggravating a housing market that has endured years of high interest rates and low supply.

The increase comes after the US Federal Reserve hiked interest rates, which directly affect mortgage rates, for the first time since 2023, citing high inflation.

Rates on 16 September went up by a quarter of a point, to a range of 3.75% to 4%. In new projections, a majority of the Fed’s rate-setting committee predicted at least one additional rate hike before the end of this year.

Last year, the Freddie Mac 30-year-mortgage rate, commonly used on home loans across the country, had been trending down from 7.79% – a generational high reached in late 2023.