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Average Long-Term US Mortgage Rates Rise To Highest Level In A Year 

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The average long-term US mortgage rate has risen for the fourth consecutive week in a row to the highest it’s been in a year. This marks another major setback for prospective homebuyers who were looking for a break in the market to ideally make their home owning dreams come true. 

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Mortgage buyer Freddie Mac told PBS this week that the benchmark 30-year fixed rate mortgage rose to 6.66% from 6.58% last week; one year ago the average rate was 6.72%. 

For borrowers, higher mortgage rates could add hundreds of dollars a month in costs and limit homebuyers purchasing ability. As the rates continue to rise, prospective shoppers will likely delay buying a home. This is reflected in how slow home sales have been in the US this year. 

Borrowing costs on a 15-year fixed-rate mortgage also rose this week. 15-year fixed-rate mortgages are often sought out by borrowers who are looking to refinance a home loan. The average rate increased to 6.04% from 5.96% last week, and a year ago it was at 5.85%, Freddie Mac stated. 

The Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation are two of several factors that impact mortgage rates. 

The Iran war has also been a driving factor in the rising mortgage rates throughout the US, as it’s caused oil prices to increase and fueled expectations of general inflation. 

The 10-year Treasury yield was 4.66% Thursday on the bond market compared to being just 3.97% in February, right before the war. 

The average rate on a 30-year mortgage is now at the highest level since July 31st, 2025 when it was 6.72%. In late February, the average rate dropped slightly below 6% for the first time since late 2022. 

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The Federal Reserve is struggling to combat high inflation. 

“Fed members are no longer in lockstep on inflation and that their next move is not going to be a rate cut,” said Anthony Smith, senior economist at Realtor.com.

“With the Fed signaling that its next move is more likely a hike than a cut, near-term rate relief looks unlikely,” Smith said.

 “Because oil remains the primary channel through which the Iran conflict feeds inflation, a de-escalation and a reopening of the Strait of Hormuz remains the clearest path back toward lower rates.”

Average long-term mortgage rates are lower than they were at this time last year, however, their increase in general has had a major impact on the US housing market. In fact, there’s been a national housing market slump since 2022, when mortgage rates began to climb from pandemic-era lows. 

“Mortgage applications, which include loans to buy a home or refinance an existing mortgage, fell 6.4% last week from the previous week,” according to the Mortgage Bankers Association.

“While incoming economic data will continue to shape the outlook for interest rates, elevated borrowing costs remain a challenge this summer for many prospective homebuyers,” said MBA CEO Bob Broeksmit.

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The Housing Markets Where Buyers Have Gained the Most Power

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The clearest sign that buyers have more room to maneuver may not be found in home prices alone. It may be found in how long a listing sits before a seller accepts an offer.

In May 2026, homes in some major markets were still moving in less than a week. But in parts of Florida, Texas, Louisiana, and the broader Southeast, listings often took several weeks, or even more than two months, to go pending. That widening gap shows just how much the housing market has splintered since the 2022 frenzy.

Zillow data shows that the typical U.S. home listed for sale in May 2026 went pending after about 18 days. In May 2022, the national median was just six days, meaning the typical home was moving three times faster four years ago.

That shift marks a dramatic change from spring 2022, when competition among buyers reached one of the most intense points on record. Listings in many markets were claimed almost as soon as they appeared, with buyers trying to secure homes before mortgage rates climbed further and affordability worsened.

Today, the slowdown is most evident in parts of the Sunbelt.

The metros where homes took the longest to go pending in May 2026 were overwhelmingly located in Florida and Texas. Among the nation’s 250 largest housing markets, the 10 slowest-moving metros were:

  • McAllen, TX: 79 days
    • Laredo, TX: 75 days
    • Naples, FL: 74 days
    • Cape Coral, FL: 66 days
    • Punta Gorda, FL: 66 days
    • Brownsville, TX: 65 days
    • Panama City, FL: 59 days
    • Houma, LA: 58 days
    • Port St. Lucie, FL: 54 days
    • Ocala, FL: 54 days

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Those numbers point to markets where buyers are no longer being pushed into near-instant decisions. Longer selling timelines can give shoppers more time to tour homes, compare listings, request repairs, negotiate price, or seek concessions from sellers.

That is why “median days to pending” is closely watched as a measure of local housing-market leverage. The metric tracks the typical time between listing and going under contract. Because that usually happens before the sale closes, the measure can reveal shifts in demand and inventory earlier than closed-sales data.

When the number of days rises, it can suggest that a market is softening or that sellers are facing less urgency from buyers. When the figure declines, “falling days to pending” can signal a market where competition is increasing, and available supply is being absorbed more quickly.

Florida offers some of the clearest examples of the change. In Miami, the median home took only 10 days to go pending in May 2022. By May 2026, that had stretched to 52 days. Tampa moved from 5 days to 34 days, while Jacksonville moved from 5 days to 43 days.

Other Florida metros also ranked among the slowest-moving markets in the country. Cape Coral, Naples, Punta Gorda, Port St. Lucie, Panama City, and Ocala all posted median times to pending of 54 days or more in May 2026.

Texas has seen a similar shift in several markets. Austin, one of the emblematic boomtowns of the pandemic-era housing surge, went from 11 days to pending in May 2022 to 41 days in May 2026. McAllen, Laredo, and Brownsville ranked among the slowest-moving markets in the country, each with a median time-to-pending of 65 days or more.

Across many of these metros, the longer timelines reflect a very different supply-demand picture than the one that dominated four years earlier. Inventory has risen in many Sunbelt markets, and the buyers still shopping are not operating with the same level of urgency that defined the pandemic boom.

The opposite pattern is still playing out in several inventory-constrained markets, where limited supply has kept listings moving quickly despite elevated mortgage rates.

Many markets in the Midwest and Northeast are still seeing homes go pending quickly. That has kept the pressure on buyers in places where there simply are not enough listings to slow the market in a meaningful way.

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The fastest-moving metro among the nation’s 250 largest housing markets in May 2026 was Springfield, Illinois, where the median home went pending in four days. Several other markets followed closely behind:

  • Springfield, IL: 4 days
    • Kansas City, MO: 5 days
    • Columbus, OH: 5 days
    • Lancaster, PA: 5 days
    • Anchorage, AK: 5 days
    • Grand Rapids, MI: 6 days
    • Hartford, CT: 6 days
    • Richmond, VA: 6 days
    • Cincinnati, OH: 6 days
    • St. Louis, MO: 6 days

Several additional metros also recorded a median days-to-pending of 6 days in May 2026. They included Dayton, Ohio; Syracuse, New York; York, Pennsylvania; Reading, Pennsylvania; Manchester, New Hampshire; Peoria, Illinois; Ann Arbor, Michigan; Erie, Pennsylvania; and Topeka, Kansas.

The gap between the slowest and fastest markets is wide. In McAllen, Laredo, Naples, and Cape Coral, the typical listing lingered for more than two months. In Springfield, Columbus, Lancaster, Hartford, Cincinnati, and St. Louis, homes were still going under contract in under a week.

That divide also shows up when comparing current conditions with the 2022 market peak.

Chicago’s median days to pending increased only slightly, from six days in May 2022 to eight days in May 2026. Philadelphia moved from seven days to nine days. Boston went from six days to eight days. Cincinnati rose from three days to six days.

Those modest increases stand in sharp contrast to the jumps seen in Miami, Tampa, Jacksonville, Austin, and other former boom markets. The comparison suggests that the national cooldown has been shaped less by a single housing-market reset than by a patchwork of local inventory conditions.

For sellers, the data shows that pricing strategy now matters far more in markets where listings are lingering. A home that might have drawn multiple rapid offers in 2022 may now need to compete with a larger pool of available listings, especially in metros where inventory has expanded.

For buyers, that means the experience can look completely different from one metro to another. In slower-moving markets, shoppers may have more room to negotiate or take time before making an offer. In faster-moving markets, limited supply can still make the process feel competitive.

Four years after homes routinely went under contract within days, the U.S. housing market is moving at a much slower pace nationwide. But the slowdown is concentrated most heavily in parts of Florida, Texas, Louisiana, and the broader Southeast. In McAllen, Laredo, Naples, and Cape Coral, listings are lingering long enough for buyers to have meaningful room to negotiate. In Springfield, Columbus, Lancaster, Hartford, Cincinnati, and St. Louis, the clock is still ticking quickly.

What Will Mortgage Rates Look Like in 2025?

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With long-term mortgage costs rising within the past year, many potential homebuyers are cautious and curious as to what the next year will hold for the future of purchasing property.

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45% Of Real Estate Agents Claim They’re Struggling To Pay Rent 

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According to a monthly report from Alignable, 45% of real estate agents who own their firms stated that they’re struggling to pay their offices rent in the month of November. This is a 5% increase from October, and 10% higher than September’s data, citing a consistent increase. 

This data aligns with the attitudes of US homeowners as of late, as many who are wanting to move are currently waiting for the market to improve and constant high housing costs to decrease. Overall inventory for homes on sale is also the lowest it’s been in a very long time. 

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Corey Burr, the senior vice president at TTR Sotheby’s International Realty, stated that these recent reports aren’t actually surprising. He discussed how recent interest rate hikes have been driving up mortgage rates and bringing home sales to a lull. 

“I think that the Federal Reserve has put us in this spot where they essentially froze up the residential real estate market by holding interest rates low for so long, and then increasing them so much so quickly. It’s created incredible distortions in our marketplace.” Burr says.

Burr also discussed that he’s been in the real estate industry for over 36 years, so he’s very experienced in following the ups and downs of the real estate market when you own a small business. 

“We are in a spot in the real estate cycle that is hardest for brokerages, particularly the smaller ones who have less market share, and who have fewer assets than the larger brokerages to ride out the storm,” Burr says.

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Prospective buyers are paying close attention to the market as well. High mortgage rates combined with an increase in buyers backing out of deals have led to a major decline in sales. 

Last month, pending home sales were down by 1.5% from September and 8.5% from last year, which is the lowest pending-sales figures according to the National Association of Realtors. 

Burr also mentioned that he expects the amount of realtors to decline across North America as the market continues to struggle, citing that over 60,000 agents left the industry in the first six months of the year. 

Some real estate data analysts are predicting that mortgage rates should decline within the next year. The National Association of Realtors economist Lawrence Yun predicted in early November that mortgage rates could reach between 6% to 7% by next spring and home sales could increase by 13.5% in 2024.

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Mortgage Rates Hit a 20-Year High of 6.92%

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According to Freddie Mac, mortgage rates reached a 20-year high last week due to rising interest rates, now at a whopping 6.92%. The Federal Reserve is continuing its aggressive monetary policy to squash surging inflation, sending shockwaves throughout the housing market.

The federal funds rate is projected to reach 4.4% by the end of 2022. Russia’s invasion of Ukraine, supply chain issues and record low interest rates during the pandemic led to unprecedented inflation, prompting the Fed’s policy initiative.

While the Fed continues to wrangle with inflation, the housing market is especially feeling the pinch of higher interest rates. The S&P 500 and the New York Stock Exchange also fell 20% from this time last year as a result of these rate hikes. The declines have continued for several weeks.

Despite the Fed’s efforts, the consumer price index has not significantly budged. The index rose to 8.2% in September, far from the Fed’s eventual target of 2%.

For the last 15 years, mortgage rates in the U.S. have been relatively low. Thirty-year fixed mortgage rates were notably low during the previous two years, hovering between 2.5% and 3.5% between 2020 and early 2022.

However, mortgage rates spiked in recent weeks. As of Oct. 13, the thirty-year mortgage rate is at a two-decade high of 6.92%. The fifteen-year rate is at 6.09%.

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Freddie Mac’s chief economist Sam Khater released a statement regarding the rates.

“Rates resumed their record-setting climb this week, with the 30-year fixed-rate mortgage reaching its highest level since April 2002. We continue to see a tale of two economies in the data: strong job and wage growth are keeping consumers’ balance sheets positive, while lingering inflation, recession fears and housing affordability are driving housing demand down precipitously. The next several months will undoubtedly be important for the economy and the housing market.”

The Fed has been clear about its plan to continue increasing the federal funds rate until prices begin to level out. Mortgage rates tend to rise alongside the federal funds rate.

In September, the chairman of the Fed, Jerome Powell, said there is no way to avoid the rising unemployment and slowing growth that will follow the Fed’s current monetary policy. The consequences of out-of-control interest rates may be even more disastrous for the economy than necessary rising interest rates. The Fed estimates unemployment will climb to 4.4% in 2023 and 2024, up from the current rate of 3.5%.

“We have to get inflation behind us. I wish there were a painless way to do that. There isn’t.”

Some experts are taken aback by how quickly mortgage rates are rising. Economist Matthew Speakman from Zillow told ABC News that “few could have predicted exactly how far and how fast they have risen.”

“There’s not a lot of incentive for rates to come down dramatically in the near-term, but that doesn’t necessarily mean they’re going to keep running away at this pace.”

The relationship between homebuyer behavior and rising mortgage rates is complicated. In general, higher mortgage rates reduce demand, which drives down the prices of homes. Real estate prices are falling, but not as rapidly as expected, in the face of the skyrocketing mortgage rates.

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Daryl Fairweather, an economist at Redfin, spoke on the complexity of the current housing market.

“It’s like a standoff between buyers and sellers. Buyers can’t afford higher prices, and sellers don’t want to sell for lower prices.”

Recession worries, rising inflation and high-interest rates have made things appear bleak, but many experts believe mortgage rates will not continue to skyrocket. Lawrence Yun, the chief economist at the National Association of Realtors, predicts that rates will hover around the resistance point of 7%.

“We don’t want to see a bursting out of that second resistance and going up, because you’re talking about 8.5% mortgage rates, something that we clearly do not want to see. The 7% interest rate could be the new normal.”

In July, Yun released a statement predicting that higher mortgage rates will persist as long as the high inflation rate persists.

“If consumer price inflation continues to rise, then mortgage rates will move higher. Rates will stabilize only when signs of peak inflation appear. If inflation is contained, then mortgage rates may even decline somewhat.”

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US Home Prices Decline at Fastest Pace Since 2008 Financial Crisis

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We are in the middle of the most significant two-month drop in home prices since shortly after the collapse of the Lehman Brothers in September 2008. Prices have been declining at the fastest pace since the Great Recession, prompting some experts to believe we are entering a housing market correction.

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Homebuilder Sentiment Falls for Ninth Consecutive Month

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U.S. homebuilder confidence in the housing market dropped to its lowest level since the beginning of the COVID-19 pandemic. Experts believe the high inflation rate and rising borrowing costs are contributing to first-time homebuyers’ hesitancy to purchase new single-family homes.

The National Association of Home Builders/ Wells Fargo Housing Market Index, which measures the activity of the single-family housing market, fell to 46 in September after declining for the ninth consecutive month. The last nine months are the most prolonged and persistent decline in builder sentiment in the last four decades.

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Experts say a Housing Market Index above 50 shows a healthy market with net positive growth. In November 2020, the index rose to 76, the highest in 35 years, due to the Federal Reserve pushing the federal funds rate to nearly zero. After the pandemic’s dampening effect, the Fed’s loosening of the federal funds rate was meant to stimulate the economy back to health.

Recently The Federal Reserve has been raising interest rates by adopting an aggressive monetary policy to bring the inflation rate back down to sustainable levels. A lack of supply due to construction costs fueled by those interest rates has slowed down building into a housing recession.

NAHB chairman Jerry Konter said builders are responding to a falling market by using incentives to bolster sales, “including mortgage rate buydowns, free amenities and price reductions.”

Pantheon Macroeconomics analyst Ian Shepherdson believes that builder sentiment will continue to decline.

 “This probably will not mark the bottom of the cycle, given the latest surge in mortgage rates above 6%. The rate of fall of mortgage applications slowed over the summer, but the early September numbers point to a renewed sharp decline.”

Mortgage rates have skyrocketed to those seen during the 2008 housing crisis, with interest rates on 30-year fixed loans hitting 6%. According to data released from the Mortgage Bankers Association, mortgage rates have already risen 4% so far this year.

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This increase in mortgage rates would add $389,000 in interest payments to the life of a $500,000 single-family home purchase. The association’s data also showed that the seasonally adjusted MBA Purchase Index rose only 0.2%. New applications for mortgages went down  1.2%.

Though builder sentiment often signals the eventual direction of mortgage applications, NAHB CEO Jerry Howard told Fox Business that people should have confidence that the housing market will pick back up again.

“I think you’re seeing a weakening in virtually every market, but those that were stronger are weakening less. I guess the most important thing that investors and people need to remember is that Americans still want to own their homes and that, as soon as the conditions turn a little more favorable, housing will pick up. That will pick up the whole economy.”

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Home Sale Cancellations Seeing Highest Rates Since Start Of Pandemic

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According to a new report by real estate brokerage company Redfin, 60,000 agreed home purchases fell through nationwide in June, which is equal to 14.9% of total homes that went under contract in the month.

That number is the highest since the COVID-19 pandemic began in March and April of 2020, where 17.6% and 16.4% of houses under contract fell through, respectively.

This month’s rate rose from 12.7% in May and 11.2% in 2021. “The slowdown in housing-market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” Redfin deputy chief economist Taylor Marr explained.

“Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process.”

Marr additionally noted that raised mortgage rates are playing a role in cancellations. “If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for a loan,” he said.

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The Federal Reserve previously raised its benchmark interest rates to 0.75% on June 15 in an effort to lower the now-9.1% inflation rate. With a possible recession on the horizon, it clearly impacted buyers who found themselves on the cusp of securing a property.

“When mortgage rates shot up to almost 6% in June, we saw a number of buyers back out of deals,” Miami Redfin mortgage agent Lindsay Garcia recounted, saying some buyers could no longer get a loan due to the rate jumps. “Buyers are also more skittish than usual due to economic uncertainty.”

Among the markets that saw the highest percentage of pull-outs during a pending sale include Las Vegas (27.2%) and several Florida cities like Lakeland (26.7%), Cape Coral (25.7%), Port St. Lucie (25.7%), and Jacksonville (25.3%).

Unlike Southwest metro areas, the Northeast saw a minimal loss of sales with Newark, New Jersey, Rochester, New York, Nassau County, New York, and Montgomery County, Pennsylvania all at or below 6%.

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As Fox News notes, homebuilders are also experiencing cancellations. A survey conducted by John Burns Real Estate Consulting (JBREC) in June found that cancellation rates of new builds flew up to 14.5%. That’s up from 10.4% this past May and 6.5% in June of 2021. Total home sales also fell by 31%.

The increased mortgage rates have also seen the average amount of home purchase loans diminish. The week ending on July 8 saw total mortgage application volume hit 1.7%, while the loan size fell to $415,000. Mortgage applications to buy a home fell by 4%.

However, 30-year fixed mortgage rates finally saw a win by cooling off to 5.3%, which Redfin reports is the largest one-week drop since 2008. That should give potential buyers an opening to save before rates increase again.

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Federal Reserve Raises Interest Rates By 0.5% In Largest Move Since 2000

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On Wednesday, the Federal Reserve raised short-term interest rates by 0.5% to 1.00%, marking the largest increase in over two decades as it attempts to fight the ever-increasing inflation that has continued to cause financial burdens for Americans.

Since 2000, the Fed has only raised interest rates in increments of 0.25%. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,” the Fed said in a FOMC statement. “The Committee is highly attentive to inflation risks.”

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In March, inflation rates rose to 8.5%, up 0.6% from February’s 7.9% and 1.5% from December’s 7%. It’s now the highest inflation rate the country has seen since the 1980s, though forecasts project a downturn over the coming months. The increased interest rates will take time to lower the inflation, however.

The Fed explained it’s monitoring the situation of the 10-week-old Russian invasion of Ukraine — citing “tremendous human and economic hardship” — among other global issues that have essentially stalled production and sent the supply chain spiraling.

“The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions.”

As for what this all means for the average citizen, borrowing will become more expensive. Higher interests rates will occur for mortgages, student debt, car loans, credit cards, and business loans for both small and large companies.

Higher mortgage rates are a particularly hard pill to swallow for those in the already difficult-to-navigate real estate market, as home prices alone have shot up during the COVID-19 pandemic. In the first quarter of 2021, the average home sold for $507,800.

Currently, a 30-year fixed-rate mortgage rate sits at over 5%, up from 3.10% in early-December and 4.16% in mid-March. The Fed will now discuss increased interest rates between 0.75% to 1.00% in June and July, while some officials have advocated for raising rates to 2.5% by the end of 2022.

Following the Fed’s announcement, the Dow Jones Industrial Average spiked up 900 points to 34,064 before dropping 1,000 points Thursday morning, or 2.9%. The S&P 500 saw a 3.3% drop, while the Nasdaq Composite fell 4.6%. Similarly, Google’s parent company, Alphabet, had a 5.3% slide.

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Speaking Wednesday, Fed Chairman Jerome Powell attempted to relay that the bank understands the financial hardship Americans are going through, and explained the raising interests rates were done in order to relief that inflation tension. “Inflation is much too high, and we understand the hardship it is causing,” Powell said.

Powell also emphasized his belief that the economy can withstand the higher rates, with unemployment rates dropping by 0.2% from February to March and total job openings rate at 7.1%, a year-over-year increase of 1.6%. “Nothing about it says it’s close to or vulnerable to a recession,” he said.

President Joe Biden has previously supported the Fed’s monetary decisions. “The Federal Reserve provided extraordinary support during the crisis for the previous year and a half,” he said back in January. “Given the strength of our economy and pace of recent price increases, it’s appropriate — as Fed Chairman Powell has indicated — to recalibrate the support that is now necessary.”

The actions aren’t without concerns, however. As the Associated Press notes, many have criticized the Fed for taking too long to tackle inflation, leading to doubt from analysts that a recession can ultimately be avoided.

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Redfin Predicts More Balanced Housing Market, Slower Price Growth In 2022

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For those that have been frustrated by the one-sidedness of the real estate market in the past months, the Newy Year should bring you some peace. According to Redfin chief economist Daryl Fairweather, 2022 will see a more balanced housing market.

While Fairweather warned that it won’t entirely be a buyer’s market, there will be more selection and slower price growth. Stalled price growth is a particularly needed occurrence – since 1965, home prices have gone up 118%, while they jumped 25% from 2008 to 2021.

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So, how will prices slow in spite of the jumps they’ve taken in past decades? Fairweather explained that rests in the hands of mortgage rates, which he predicts will rise from 3% to 3.6% due to “pandemic subsiding and lingering inflation.”

“By winter, higher mortgage rates along with already high home prices will likely slow annual price growth down to around 3%, which represents a steep drop from the record 24% increase posted in May 2021.”

With higher mortgage rates, Fairweather said, first-time home buyers will have better chances at grabbing a property while other potential buyers could be discouraged. It would be a welcomed change for first-time buyers, who had tough sledding in 2021.

According to the National Association of Realtors, first-timers made up just one-quarter — or 26% — of the market in November. That mark was the lowest since Jan. 2014. NAR noted first-time buyers made up 33% of home sale buyers in 2020.

While home prices will slow, they won’t stop increasing entirely. Economists and industry leaders who participated in NAR’s Real Estate Forecast Summit predicted prices to rise 5.7%. NAR’s forecasts expect prices to rise, but while remaining under 5%.

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Fairweather made a number of other predictions for 2022, which includes rents raising by 7%. The economist sees several reasons why renting will be in higher demand, such as people choosing to live in cities where renting is common and more people moving to cities due to a strong labor market.

A 7% rental increase would be sizeable compared to previous years. In 2020, the median gross rent rose only 2.6%, while rental rates rose 31% of the past 10 years – an average of 3.1% per year. Redfin’s deputy chief economist explained that millennials will likely be forced to fall back on renting due to high affordability.

“Home prices will remain at record highs requiring hefty down payments at the same time rising mortgage rates will make home buying more expensive, so many potential first-time homebuyers will choose to keep renting.”

Fairweather also believes that politics will play a role in real estate movements, with people relocating to places where their beliefs are more accepted. While the feuds over mask mandates and vaccinations have made states much more diverse to live in, older political debates — such as abortion and pro-guns — while also influence homeowners.

A Redfin survey found that one in seven recent movers said they wouldn’t move to a state where abortion is fully legal. Home values also vary depending on a state’s alignment, giving an additional factor for movers to consider – 77%, or over $20 trillion, of the total U.S. residential real estate value lies in blue states, while red states account for just $7 trillion.