The US housing market is under intense pressure from climbing interest rates.

Data from Mortgage News Daily shows the average rate on a 30-year fixed-rate mortgage climbed to 7.24% on September 16, a sharp 27 basis point jump from 6.97% a week earlier. By September 17, the rate had eased slightly to 7.19%, yet it remains notably above the 7% threshold.

Meanwhile, Freddie Mac reported Thursday that the average rate on a 30-year fixed mortgage rose to 6.95% for the week ending September 17, up 19 basis points from 6.76% the prior week, marking the highest level since January 2025. Freddie Mac releases its survey data on a weekly basis, while Mortgage News Daily tracks daily transaction rates more closely, resulting in differences in sampling frequency and timeliness between the two sources.

Analysts point out that mortgage rates hovering around 7% have significantly eroded housing affordability; in July, housing costs already consumed 44% of a typical household's income, well above the 30% affordability level generally considered sustainable. According to a previous report, existing home sales in the US fell 2% month-over-month in August, hitting their lowest level in over a year, while the months' supply of inventory reached a ten-year high.

Long-end Treasury yields remain the pivotal factor

US mortgage rates are closely tied to long-end Treasury yields. The Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, its first hike since July 2023. On Thursday, Treasury yields retreated slightly from Wednesday's levels but stayed elevated, with the 10-year yield at 4.94% and the 30-year yield at 5.29% as of press time.

Structural factors are jointly pushing long-end rates higher: the US federal debt has surpassed $40 trillion, AI capital expenditures are driving massive corporate bond issuance that competes for funding, and high oil prices are fueling expectations that inflation will stay higher for longer.

On one hand, higher monthly payments directly weaken homebuying demand; on the other, existing homeowners who refinanced at rates less than half of current levels years ago face the dilemma of "selling means losing a low-rate mortgage," prompting them to stay put. With home prices still elevated and mortgage rates high, these homeowners show little willingness to sell, leaving the housing market caught in a double bind of "unaffordable to buy and hard to sell."