Sept. 4, 2026
The housing market is beginning to look like a perfect storm. Prices of co-ops and condos in New York City keep rising. The supply keeps shrinking. Inflation keeps pressing, and the Iran War keeps dragging on. Sky-high national debt has roiled the bond market. And now mortgage rates have jumped to their highest number since last summer.
The mortgage finance giant Freddie Mac said Thursday that the 30-year fixed-rate mortgage, the most common home loan in the United States, hit 6.71%, up from 6.66% the week before and the highest since July 2025, The New York Times reports.
The U.S. housing market has essentially been stuck for the past several years, squeezed between high prices and high mortgage rates. Jonathan Miller, a real estate appraiser and consultant, said mortgage rates had ascended at their steepest pace in history. Rates are now double what they were during the Covid-19 pandemic.
Many co-op and condo buyers at that time were able to secure mortgage rates below 3%, which unlock enormous reductions on their monthly payments. Moving to a new home could double their mortgage rates, a significant jump in expenses. As a result, homeowners nationwide are staying put much longer than they otherwise might because they want to keep their low rates. The result: low inventory and high prices.
Prices increased 1.5% annually in June, up from 1.2% growth the previous month, according to Cotality, a housing market data provider.
“They’re rising because in large regions of the country, there just isn’t enough inventory,” Miller said.
Mortgage rates are closely tied to 10-year Treasury bonds, and yields on those notes have been climbing amid investor concerns about government deficits and elevated inflation. The U.S. national debt has hit the staggering pleateau of $40 trillion, the highest in the nation’s history and double what it was a decade ago, thanks in part to the Iran War and President Trump’s tax cuts. But the problem stretches beyond the United States: This week, a global sell-off in bonds intensified as investors demanded higher returns in exchange for holding government debt.
The sell-off has been fed by a number of factors. The world’s richest nations have been borrowing vast sums of money, and investors worry that governments are not prepared to take steps to address their ballooning deficits. These fears are compounded by the growing cost of debt that is a result of a surge in borrowing by technology companies building artificial intelligence systems. The war in Iran, with its accompanying rise in oil prices, has been a challenge for the global economy as well, increasing concerns about persistently high inflation.
This week, bond yields in some countries, including Germany, Britain and Japan, hit their highest levels in years.
It all adds up to a perfect — and worldwide — storm.