Mortgage Rates Surge to 18-Month High of 6.95% After Fed Hike

Mortgage rates reached their highest level in nearly 18 months, driven by climbing Treasury yields that hit a level not seen since 2007 ahead of the Federal Reserve’s rate increase decision. The average rate on 30-year fixed home loans jumped to 6.95% for the week ending Sept. 17, up 19 basis points from 6.76% the previous week and the highest since late June 2025, according to Freddie Mac. For perspective, rates averaged 6.26% one year ago.This marks the biggest one-week rate increase since April 2025, when the economy was roiled by President Donald Trump's tariff policies."The 30-year fixed-rate mortgage continues to fluctuate as markets assess economic data," says Sam Khater, Freddie Mac's chief economist.The primary catalyst for the surge is rising 10-year Treasury yields, which climbed to their highest levels in 19 years, topping 5% on Tuesday in anticipation of Wednesday’s 12-0 vote by the Federal Open Market Committee (FOMC) members to increase the benchmark interest rate. The quarter percentage point hike—the first increase in three years—brings the federal funds rate to a range of 3.75% to 4% in an attempt to rein in inflation fueled by high oil prices resulting from the o...