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Originally Published: Oct 27, 2022
Originally Published: Oct 27, 2022 Last Updated: Oct 28, 2022 7 min read
A House With A Shadow In The Form Of A Seven Percent Symbol
Jose Velez; Money

What seemed unthinkable just a few months ago has come to pass — Freddie Mac’s benchmark mortgage rate has surpassed 7%.

The average rate on a 30-year fixed-rate loan came in at 7.08% this week, according to Freddie Mac’s weekly lender survey. That’s the highest average rate since 2002.

Rates started the year at just 3.22%. The increase since has been one of the fastest in the survey’s 51-year history.

“The rate of increase caught us by surprise,” said Len Kiefer, deputy chief economist at Freddie Mac, in a webinar entitled A Conversation About the Economy.

“That’s got enormous consequences for the housing market, the mortgage industry and the broader U.S. economy,” he added.

Mortgage rates have taken flight thanks to inflation, which has been running at more than 8% since March. In order to slow inflation, the Federal Reserve has increased the federal funds rate — the rate banks charge each other for overnight borrowing — by a total of 3.25% this year.

That has pushed interest rates on all sorts of consumer credit products, including mortgages, higher.

Rates are subject to change. All information provided here is accurate as of the publish date.