US Mortgage Rates Hit 7.22%, a 2024 High

A homebuyer taking out a $500,000 mortgage today is paying roughly $3,401 a month in principal and interest, based on the current average rate. Two weeks ago, at the level rates sat then, that same loan would have cost about $3,276 a month, a difference of over $1,500 a year for a buyer who simply closed a few weeks later. The average rate on a new 30-year fixed mortgage has hit 7.22%, its highest level since May 2024, after climbing more than 100 basis points since a low on February 23, the week before the Iran war began.

That timing is not a coincidence. Mortgage rates track the 10-year Treasury yield closely, and Treasury yields have been climbing for the same reason oil has: the war has disrupted Gulf crude supply, pushed energy prices sharply higher, and forced traders to price in stickier inflation and a Fed that may need to hold rates higher for longer, or even hike, rather than cut. A borrowing cost that briefly looked like it might drift back toward 6% earlier this year has instead reversed hard in the other direction over seven months.

This is the second leg of a climb the site has been tracking for weeks. Rates had already pushed up to 6.85% as the Fed neared a rare rate hike earlier this month, and the move to 7.22% shows that repricing has continued rather than stalled. For a housing market that was already showing signs of strain, that's a meaningful deterioration in a short window. The income needed to afford an average US home had already hit a record $124,674 before this latest rate move, a figure that only grows less attainable for the median household as financing costs climb further.

The strain is already visible in transaction data, not just affordability math. Home-purchase cancellations have climbed to 14%, the highest rate since late 2023, as buyers who locked in a home under contract at one rate environment find the numbers no longer work by the time they're set to close, or simply get cold feet watching rates move against them in real time. Mortgage applications and refinancing activity both tend to fall sharply once the 30-year rate clears 7%, a threshold that has historically marked the point where a large share of potential buyers simply exit the market rather than accept the higher payment.

The broader bond market backdrop makes this look less like a temporary spike than a genuine regime shift. Longer-dated Treasury yields have been pushing to multi-year highs across the curve as inflation expectations reset upward; the 30-year yield alone has recently topped 5.4%, its highest level since 2004. Mortgage rates, which price off a spread over the 10-year rather than the 30-year, have followed that move up in step. Unless oil prices ease and take inflation expectations back down with them, or the Fed signals it's willing to look past energy-driven inflation and cut anyway, the path of least resistance for mortgage rates from here looks like sideways-to-higher rather than a quick reversal back toward last year's lows.

The pain isn't limited to new buyers. Homeowners who locked in low rates during 2020 and 2021 and had been weighing a move face an even wider gap now between their existing rate and what a new mortgage would cost, a dynamic that has kept existing-home inventory unusually tight for years and shows no sign of easing as the spread widens further. Refinancing activity, which briefly picked up whenever rates dipped toward 6% earlier this year, tends to dry up almost completely once the 30-year average clears 7%, since few homeowners have any incentive to trade a lower locked-in rate for a higher one. That leaves builders and new-construction sales as one of the few channels still able to offer rate buydowns and incentives to keep deals moving, a role they've leaned into more heavily as resale inventory stays scarce.