Are mortgage rates slowly rising to 7%? We are very close to it right now, and, historically speaking, it’s not foreign territory. In fact, 7.71% is the 54-year average for 30-year fixed mortgage rates, according to Freddie Mac.
So rates would have to move even higher just to meet the long-term mean.
So, are 7% mortgage interest rates in the cards? And if so, how soon?
Learn more: Historical mortgage rates — How do they compare to today’s rates?
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The 30-year home loan rate has been in 7% territory many times over the past four years.
According to Freddie Mac, mortgage rates already edged above 7% (7.04%) for one week this year — in January 2025. They stepped over 7% for six weeks in 2024, 17 weeks in 2023, and twice in 2022.
Before that, it had been 20 years since mortgage rates were last above 7%.
The July 2025 forecast by the Mortgage Bankers Association (MBA) calls for 30-year home loan rates to be near 6.7% by the end of the year. From there, the MBA expects rates to be incrementally lower — near 6.6% — for the first half of 2026. An incremental decline to 6.5% is forecast for the third quarter of 2026, then 6.4% by the end of next year.
Meanwhile, Fannie Mae expects mortgage rates to end 2025 near 6.5% and 2026 at 6.1%.
And Realtor.com predicts rates to be down slightly to 6.4% by the end of this year.
So, if the forecasts hold, we may miss hitting 7% home loan rates in the near future, but there’s little room for error.
Dig deeper: When will mortgage rates go down significantly?
Now, let’s consider the impact of 30-year fixed mortgage rates ranging from 6%, 6.5%, and 7% on a $300,000 mortgage loan. (Numbers have been rounded to the nearest dollar.)
The difference in a $300,000 mortgage at 6.5% and 7% would mean an increase of about $100 to your monthly payment, and more than $35,000 in additional interest over the life of the loan.
Conversely, if rates were to fall from 6.5% back down to 6%, you would save about $100 a month and about $35,000 in interest.
One of the easiest and most reliable ways to track upcoming movements for mortgage rates is to follow the 10-year Treasury note. It’s very much a barometer of where home loan rates are headed. You can quickly and easily check it by bookmarking Yahoo Finance’s 10-year Treasury chart.
If you see a trend of the 10-year moving lower, you can expect to see that momentum eventually transfer to mortgage rates. A pattern of higher Treasury yields? Look for mortgage rates to follow.
Why this happens: Fixed mortgage rates have a lot in common with 10-year Treasury yields. They both are long-term instruments. While a home loan is typically structured to last 30 years, U.S. homeowners typically keep a mortgage for less than 12 years. Lenders often use the 10-year as a baseline for pricing a loan by adding a profit margin to it.
It won’t take much to move mortgage rates up to 7%, but here are signs for you to watch for:
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As mentioned above, look for rising 10-year Treasury bond yields.
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Watch for news of increasing consumer costs, whether from tariffs or otherwise. That would be termed “rising inflation.”
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Listen for talk of higher government debt. This will often be characterized as increasing “deficit concerns.”
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Monitor investor enthusiasm regarding stocks. In a rising stock market, traders often leave bonds behind. In a bond market sell-off, yields rise.
Learn more: How are mortgage rates determined?
With rates so close to 7% already, a move over the line can happen quickly. With the right combination of circumstances, we could be just four weeks away from 7% mortgage rates. That’s how long it took for rates to climb from 6.72% to 7.04% back in late December to mid-January.
Or, we could be just eight weeks away from a mortgage rate close to 6% as happened in August, September, and October 2024.
Mortgage rates are unpredictable like that.
Keep reading: What happens if mortgage rates go up to 8%?
It is if you have 3% mortgage rates ingrained in your mind. However, the average mortgage rate over the past 54 years is 7.71%. Of course, that’s like comparing the average cost of a gallon of milk over 50 years, which was $1.57 in 1975 (not adjusted for inflation), and is around $4 today. When buying a house today, you probably don’t care what prices and interest rates were 50 years ago. Still, no — 7% is not a particularly high mortgage rate.
Will milk ever be $1.57 again? The analogy is wearing thin, though, right? Mortgage rates reached historic lows of sub-3% in the height of the COVID-19 pandemic and prolonged economic stress. It’s likely we’ll all be in another mask of some kind when 3% home loans come back.
No official source, such as Fannie Mae, Freddie Mac, or the Mortgage Bankers Association, dares to make predictions that far out into the future. There is simply no way to estimate the state of the world or the national economy in five years. Think of it this way: Are you sure where you’ll be living in five years?
Laura Grace Tarpley edited this article.
