While economists point to the U.S. credit downgrade this past week as a reason for the rise in 10-year Treasury yields and average 30-year mortgage rate, they also note that increased housing inventory continues to keep activity at a steady pace.
According to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac Thursday, the 30-year fixed-rate mortgage (FRM) averaged 6.86%, up slightly from last week’s average of 6.81%.
“Mortgage rates inched up this week but continue to remain lower than one year ago,” said Sam Khater, Freddie Mac’s Chief Economist. “With more inventory for buyers to choose from than the last few years, purchase application activity continues to hold up.”
Realtor.com Economist Jiayi Xu commented, “Concerns about tariffs and the growing U.S. debt burden have raised doubts about whether U.S. Treasurys remain a safe-haven asset. As a result, yields rose as investors reassessed the risk of holding U.S. debt. Since mortgage rates closely track the 10-year yield, this upward pressure has translated into increased borrowing costs for homebuyers, which means higher mortgage rates.”
Xu agrees while buyers do have access to more new listings compared to a year ago, she says overall active inventory remains well below typical pre-pandemic levels, making it difficult for many to find a home that fits their needs. At the same time, elevated mortgage rates and rising home prices are further straining affordability, she says.
“On a more positive note, for those who are moving forward with their home search, today’s slower-paced housing market may feel less stressful,” Xu adds. “Increased inventory, relatively stable prices, and longer days on the market are easing some of the competitive pressure.”
This week’s numbers:
- The 30-year FRM averaged 6.86% as of May 22, 2025, up from last week when it averaged 6.81%. A year ago at this time, the 30-year FRM averaged 6.94%.
- The 15-year FRM averaged 6.01%, up from last week when it averaged 5.92%. A year ago at this time, the 15-year FRM averaged 6.24%.
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