Mortgage rates in the U.S. climbed to their highest level since January 2025, and new home construction declined, adding to concerns about a housing market slowdown in the U.S.
The weekly average rate on a 30-year fixed-rate home loan rose to 6.95% this week, up from 6.76% last week and 6.26% one year ago, according to numbers released by Freddie Mac Thursday. The increase came one day after the Federal Reserve raised interest rates due to persistent inflation.
Idaho realtor Tara Heinz told Scripps News Group this week prospective buyers are making careful decisions in this climate.
“It’s going to take a lot of motivation to actually make a move right now,” Heinz said. “It’s got to make sense, because the numbers are a lot higher, so it’s taking a lot more strategizing in order to get a payment that’s going to work for the family.”
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The new residential construction report, also released Thursday by the U.S. Census Bureau and U.S. Department of Housing and Urban Development, showed dips in building permits, housing starts, and housing completions in August, reflecting weakening demand in the face of widespread affordability challenges.
Gas prices and food prices are up, as experts point to the war with Iran as a primary cause for recent cost of living increases.
President Trump has called the fighting and the financial strain “temporary.”
“That war is going to end very soon,” Trump told a crowd at a campaign rally in North Carolina Wednesday. “Watch, you just watch.”
