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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.

Congress Advances Major Bipartisan Housing Bill After Months Of Negotiations

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The House moved one step closer to passing the most significant housing legislation in decades on Wednesday, approving a sweeping bipartisan package designed to address rising housing costs across the United States. The bill passed by an overwhelming 396 to 13 vote, reflecting a rare moment of agreement in a deeply divided Congress as lawmakers from both parties attempt to respond to growing voter frustration over affordability.

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Sales Of Newly Built Homes Surged To Three-Year High After Builders Boost Incentives 

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Newly built homes have had a new surge in sales, peaking at a three-year high in August as homebuilders have been boosting their buyer incentives and cutting prices, according to reports from Realtor.com. 

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The U.S. Census Bureau and Department of Housing and Urban Development reported that signed contracts for new single-family homes were at a seasonally adjusted annual rate of 800,000 last month. This marks a 21% increase from July and a 15% increase when compared to last year’s figures. 

These figures from August are the highest they’ve been since January 2022, and surpass what economists were expecting to come out of the summer this year. This could indicate a major comeback for homebuilders, who like a lot of figures in the real estate industry have been struggling from the lack of property demand in the US and consistently increasing interest rates. 

Data shows that sales in August rose 72% in the Northeast, 13% in the Midwest, 25% in the South, and 5.6% in the West when compared to July’s numbers. 

Prices actually also increased last month with the average sales price for new homes reaching $413,500. This is a 1.9% increase from July and 4.7% increase when compared to last year. 

According to Freddie Mac, the increase in August sales actually occurred before mortgage rates dropped under 6.4% in recent weeks with 30-year fixed rates averaging 6.59% last month. 

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To combat the constant trend of weak demand from buyers in the US, builders are purchasing down mortgage rates and offering incentives. Additionally, new home pricing is falling, which makes newly built homes even more desirable for buyers who are trying to save money. 

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, 39% of builders reported that they were cutting prices this month, a 2% increase from the previous month, and the highest percentage in over five years. 

Realtor.com® Senior Economist Anthony Smith stated: “Builders remain more willing than individual sellers to adjust prices, but even with these concessions, the market is still gauging how much demand can be coaxed back.” 

“Another reason the New Home sector got a bump could be the trend toward the construction of smaller homes. With more people wanting to downsize, smaller homes are becoming more attractive,” said BrightMLS Chief Economist Lisa Sturtevant.

490,000 new houses were for sale at the end of August on a seasonally adjusted basis, according to Realtor data.

“The supply of new homes tightened notably as buyers stepped back into the market.  [The market for new homes is] still a well-supplied market, but less so than earlier in the summer,” said Smith.

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Why Are So Many Real Estate Deals Falling Through At The Last Minute In The US?

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Potential homebuyers in the US are backing out of their home purchase deals at a record rate. Real estate agents and experts throughout the country are stating that these deals are also falling through based on minor reasons, according to Yahoo! news.

“We’re seeing nightmare scenarios where deals are getting canceled at the last minute for the most minute reasons,” said Rafael Corrales, a premier agent for Redfin in Miami. Miami recently saw 2,500 home purchases get canceled in the month of June. 

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“Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue,” Corrales stated. 

Redfin recently released a report that showed 56,000 home purchases were canceled last June, which is about 15% of the homes in the US that went under contract, which is the highest percentage of any June on record.

“Buyers are getting more and more selective,” said Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area.

“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” she added. 

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The average home price in America right now has increased by 4% when compared to last year, with an average price of $442,525 in June with an average mortgage rate of 6.92% 

Some potential buyers are also waiting out the market and hoping that in the autumn/September time period rates could fall lower. 

“With fewer takers, properties are languishing longer on the market, with the number of active listings climbing nearly 13% since last year,” according to Redfin.

“We’re seeing a slow shift from a seller’s market to a buyer’s market,” said National Association of Realtors chief economist Lawrence Yun in a recent press release.

“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

naples

Most Expensive Home In The US Goes On Sale For $295 Million

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The most expensive home for sale in the US has officially hit the market at a listing price of $295 million. The property is called Gordon Pointe, and is located in Naples, Florida, on the Gulf Coast within an enclave known as Port Royal. The property is also about 9-acres. 

The main house on the property is about 11,500 square feet with six bedrooms and the property has two other guest houses that are each over 5,000 square feet, making the combined total interior about 22,800 square feet. 

The three homes are located on a peninsula that has 1,650 foot waterfront with a private yacht basin and dock. 

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Co-listing agent Leighton Candler of Corcoran told CNBC that the value of the property isn’t based on the size of the three homes, but the privacy, beach frontage, and an opportunity for further significant development. 

“The property can accommodate more than 200,000 square feet of residential development, meaning the land has a ton of untapped potential,” according to the property’s press release.

“There can be eight waterfront homes on this property,” Candler added. 

The nine acres of land are made of contiguous lots. The first lot was initially purchased in 1985 by John and Rhodora Donahue. After the purchase of the first lot, the Donahues continued to buy up more and more of the peninsula until they owned the entire thing. 

Through these purchases, the Donahue’s created an exclusive, gated compound that’s almost entirely surrounded by water with a single private drive to avoid traffic. 

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“It gives you all the benefits of being on an island, but on Gordon Pointe your family can be secluded without feeling isolated,” Candler said.

Candler described that the T-shaped dock can accommodate six boats, and the Donahues constructed a private yacht basin that’s 231 feet by 50 feet and has a depth of almost 8 feet, something Candler says is a rare amenity that had to receive special approval by the US Army Corps of Engineers. 

The average listing price for properties in Port Royal is $24.1 million. Before Gordon Pointe, the highest-paid price for a home in Port Royal was for $45 million. 

“We did our best to price [Gordon Pointe] and we can defend that price all day long,” co-listing agent Dawn McKenna of Coldwell Banker Realty told CNBC.

McKenna also stated that the listing is already drawing significant interest since it first went live last Wednesday, and she’s booked eight in-person visits with prequalified buyers.

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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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US Homebuyers Investing In Florida Real Estate 

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The amount of homebuyers in Miami have tripled over the past couple of years. According to a new analysis by Redfin, in July the net inflow of Redfin users moving to Miami rose to 7,610 from 2,216 last year. 

Milagros Alvarez, a Miami real estate agent at Redfin, said that “the pandemic has brought even more out-of-towners to the area because so many people can now work wherever they want.”

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“Homebuyers are moving here from all over the map—Atlanta, Cincinnati, New York, Columbia, Mexico City, Pittsburgh and Philly, to name a few. The beaches, warm weather and low taxes are the major draws. Florida has also been much less shut down than other states during the pandemic, which some house hunters see as a positive,” said Alvarez. 

Alvarez also warned that the warm weather in Florida may seem like a main selling factor, but it also comes with its downsides. Miami is one of the most vulnerable cities when it comes to natural disasters or damages caused by weather-related events. 59% of Miami properties face some level of flood risk. 

Sea levels in Miami-Dade County are projected to rise by two feet by 2060, which would displace thousands of residents. The region also faces extreme heat risk, however, Alvarez explained that climate change hasn’t deterred Americans from flocking to the Sunshine state. 

“The homebuyers I talk to rarely mention climate change. Most of them aren’t concerned. A lot of people seem to have this idea that it won’t impact them in their lifetime, so it doesn’t need to be a consideration when buying a home.”

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Daryl Fairweather, chief economist at Redfin, warned that “the recent UN climate report shows that places like Miami will see the impacts of climate change within the next thirty years. Miami homebuyers should think about how they can make their homes more resilient to climate change and how their finances would be impacted if their homes lost value,” he said.

Sacramento, Phoenix, Las Vegas, Austin, and Atlanta have also been experiencing exponential rises in real estate investments, according to Redfin. The report also claimed that US citizens were mainly moving away from New York, San Francisco, Los Angeles, and Washington DC.

“Big, expensive cities normally lose the most residents, and that trend accelerated during the pandemic as remote work gave people the flexibility to leave expensive job centers for relatively affordable places.”

“Yet, a handful of the metros that experienced the largest outflows in July saw fewer people leaving than a year earlier—likely because many of the pandemic restrictions that made those places unattractive places to live have now been lifted,” the report said.