Mortgage rates jump, approach 7%

Mortgage rates rose this week, with the 30-year fixed rate averaging 6.97%, up from 6.76% last week, according to Bankrate's latest lender survey. That was the highest level since February 2025.

The 30-year fixed mortgages in this week's survey had an average total of 0.32 discount and origination points . Discount points are a way to lower your mortgage rate, while origination points are fees lenders charge to create, review and process your loan.

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Monthly mortgage payment at today's rates

The national median family income for 2026 is $106,800, according to the U.S. Department of Housing and Urban Development , and the median price of an existing home sold in August 2026 was $429,100, according to the National Association of Realtors. Based on a 20% down payment and a 6.97% mortgage rate, the monthly principal and interest payment of $2,277 amounts to about 26% of the typical family's monthly income.

Meanwhile, home prices are still rising — the National Association of Realtors reports the median home price was up 1.6% over the past year, and the median of $429,100 was an all-time high for the month of August. However, values have begun to dip in many formerly hot markets. Still, signs are mixed. The S&P Cotality Case-Shiller index released in late August showed national home prices grew 1.5% in the year ending in June, marking an acceleration.

What will happen to mortgage rates in the rest of 2026?

Inflation held at 3.4% in August. Oil prices have spiked amid the conflict in Iran, pushing inflation up and lifting mortgage rates from their 2026 low of 6.09%. Rising inflation has been the main driver of higher mortgage rates — the consumer price index has pushed well above the Fed's 2% target, and 10-year Treasury yields hit 5% this week, well up from earlier in the year.

Housing economists no longer expect mortgage rates to fall below 6% in the near future, a reality that's affecting home sales. Higher mortgage rates, still-record home prices and persistent inflation are likely to put the brakes on home sales. Instead, rates have risen sharply, a situation only exacerbated by the Fed's Sept. 16 rate hike.