Mortgage Rates Spike to New 15-Month High of 6.76% as Bond Market Implodes

Mortgage rates climbed to a 15-month high this week, moving in tandem with surging Treasury yields driven upward by spiking inflation expectations.

The average rate on 30-year fixed home loans jumped to 6.76% for the week ending Sept. 10, up 5 basis points from 6.71% the previous week and the highest since late June 2025, according to Freddie Mac. For perspective, rates averaged 6.35% one year ago.

"The 30-year fixed-rate mortgage averaged 6.76% this week," says Sam Khater, Freddie Mac's chief economist. "Aspiring buyers should remember shopping around for the best mortgage rate and getting multiple quotes can potentially save them thousands."

The 10-year Treasury yields, which mortgage rates closely track, topped 4.9% on Thursday, marking the highest level since November 2023. This was in response to oil prices exceeding $100 a barrel, driven by the U.S.-Iran conflict unfolding with no resolution in sight.  

"Each round of renewed tensions has reinforced the same dynamic that has driven rates higher since late February: oil prices rise, inflation fears follow, and bond markets reprice accordingly," says Realtor.com® senior economist Anthony Smith. 

August's jobs report came in above consensus expectations, with payrolls increasing 162,000 and prior months revised upward, but the strong print barely moved the odds of a rate hike at the upcoming September meeting of the Federal Open Market Committee (FOMC).

"The Fed's attention, and the bond market's, is almost entirely on inflation right now, not the labor market," stresses Smith. 

That puts Friday’s consumer price index (CPI) release in the spotlight as the decisive indicator ahead of the FOMC summit. 

"A hotter-than-expected reading would strengthen the case for a hike and add further pressure on mortgage rates," says Smith. “A cooler one could offer some relief.”

Financial markets now put the probability of the Fed raising rates next week at 69.8%, according to CME FedWatch.

On the housing front, August data showed pending sales growth turned negative for the first time since last November. 

“Pricing and delisting trends, while slightly more encouraging, haven't been enough to offset the drag from elevated rates,” points out Smith. “The market that could have been, with rates below 6% and spring momentum building, feels increasingly distant.” 

The economist forecasts that until there is meaningful relief on inflation or a durable resolution to the conflict in Iran, that housing outlook is unlikely to change.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates, which can reduce monthly payments.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. Ultimately, they want to make sure you're able to pay back the loan.