(Bloomberg) -- US mortgage rates rose last week to match the highest level since August 2025, sending applications for home purchases to the lowest level since February.
The average contract rate on a 30-year fixed mortgage climbed 7 basis points to 6.65% in the week ending July 10, according to weekly Mortgage Bankers Association data published Wednesday. Meanwhile, the group's index of mortgage purchase applications fell 7.3%.
The rise in borrowing costs and drop in applications underscores one way inflation is taking a toll on the US housing market: Investors expect the Federal Reserve to raise its benchmark interest rate in the months ahead to ward off price pressures emanating from the Iran war.
Fed Chairman Kevin Warsh, in testimony before Congress Tuesday, singled out the housing market as a weak spot in an otherwise solid economy. He said 30-year fixed-rate mortgages are elevated in part "because of inflation that has been above the Fed's objectives."
"I'm a great believer in the American dream, and I know that a mortgage and first-time house is one important step to do that, and we'll do what we can to support it," Warsh added later.
More stories like this are available on bloomberg.com
