Benchmark mortgage rate tops 7 percent

The benchmark 30-year fixed mortgage rate is 7.03 percent this week, up from 6.95 percent last week , according to data from Freddie Mac.

It marks the fifth consecutive weekly rise in mortgage rates, and the first time it has reached 7 percent since the week ending Jan. 16, 2025 — days before President Trump returned to office.

Mortgage rates still have a ways to go before reaching the 25-year high of 7.79 percent reached in October 2023. But with inflation remaining above the Federal Reserve’s 2 percent target and the Iran war continuing to push up energy prices , analysts expect home borrowing costs to remain elevated.

“Expect 7% as the new normal . Job additions will be the one factor that can support homebuying,” Lawrence Yun, chief economist for the National Association of Realtors, wrote last week.

To combat inflation, the central bank raised interest rates last week by a quarter point , to a range of 3.75 percent to 4 percent.

Fed Chair Kevin Warsh said after the decision that hiking rates would “support a timelier return” to 2 percent annual inflation, noting this summer’s inflation data does not indicate that “underlying trends have meaningfully improved.”

Multiple central bank officials have also forecast future rate hikes , with the Federal Open Market Committee (FOMC) scheduled to meet again in late October .

“Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted,” Anna Paulson , president of the Federal Reserve Bank of Philadelphia, said Thursday at a financial technology conference.

Welcome to The Hill’s Business & Economy newsletter , I’m Max Rego — bringing you the latest on the intersection of Wall Street and Pennsylvania Avenue.

Did someone forward you this newsletter? Subscribe here.

Key business and economic news with implications this week and beyond:

Chinese President Xi Jinping announced at the White House on Thursday he was gifting the U.S. with two giant pandas and invitations for 100,000 U.S. students to study in China.

A majority of residents in the Washington, D.C., area have been negatively impacted by the Trump administration’s federal job cuts, according to a new survey.

Lawmakers seek bipartisan path on paid leave, newborn tax credits

Republicans and Democrats argued Thursday that Congress still has work to do to support American families, pointing to expanded paid family leave access, tax credits for newborn children and other policies aimed at easing financial pressures on parents.

30-year bond yield now highest in 20+ years

The yield on the 30-year bond closed at more than 5.49 percent on Thursday, the note’s highest mark since 2004.

Branch out with more stories from the day:

China trade deal extended through January, Bessent says, as Xi arrives for Trump meeting

Treasury Secretary Scott Bessent said Wednesday that U.S. and Chinese officials agreed to extend their trade truce by two months, after Chinese President Xi Jinping arrived in the U.S. for a summit with President Trump.

Business and economic news we’ve flagged from other outlets:

Bob Chapek is so not over getting fired from Disney ( Wall Street Journal )

PepsiCo to raise some prices after cuts failed to grow sales ( Bloomberg )

It was received wisdom during President Trump’s first term that his hard floor of support sat somewhere around one-third of Americans. Those were the MAGA true believers, the die-hards, the folks who stood in line for hours to attend their fifth Trump rally of the year. That rule of thumb proved … Read more

The Senate on Thursday defeated a House-passed resolution directing President Trump to withdraw U.S. troops from the conflict with Iran, despite growing dissatisfaction among GOP senators over President Trump’s handling of the war. Read more

Check out The Hill’s Business page for the latest coverage.

400 N Capitol Street NW Suite 650, Washington, DC 20001

If you believe this has been sent to you in error, please safely unsubscribe .