Mortgage rates in the US, already the highest in almost a year, rose for a third week, squeezing affordability as home price growth accelerates.
The average for a 30-year, fixed loan climbed to 6.58% from 6.55% a week earlier, Freddie Mac said in a statement Thursday. The rate was 6.74% a year ago.
The property market is facing pressure from the recent flareup in hostilities with Iran that is roiling energy markets and threatening to drive up inflation and push borrowing costs higher. Until the fragile ceasefire fell apart earlier this month, rates were beginning to drift lower, giving a lift to demand.
In mid-July, home prices were up 1.7% from a year earlier, the largest increase in more than three years, according to data from Intercontinental Exchange Inc. Annual gains were the highest in upstate New York, up 8.7% in Rochester, 7.4% in Syracuse and 6.8% in Albany, while the steepest decline was in Cape Coral, Florida, down 3%.
Bright MLS Chief Economist Lisa Sturtevant expects elevated mortgage rates to result in a slow summer.
“Higher gas prices and concerns about overall inflation rising have created more financial strain for would-be buyers,” she said.
Investors see the Federal Reserve hiking interest rates at least by its September meeting as persistent inflationary forces keep price growth well above the central bank’s 2% target. Interest-rate futures as of Thursday reflected a better than 1-in-3 chance of a move at the next gathering, July 28-29, though economists surveyed by Bloomberg universally see no action this month.
Both segments have a stable outlook from AM Best. Together, net underwriting income jumped to $5.8 billion in 2025 from $12.4 billion in 2024.
Overall, U.S. commercial insurers appear to have performed well, more than doubling underwriting income to $19.2 billion in 2025. However, not all lines enjoyed positive results.
In commercial auto, there was improvement from the $4.9 billion underwriting loss of 2024 but the line was still in the red in 2025 with a loss of about $1.9 billion. AM Best said physical damage remains profitable but liability losses “keep mounting,” as insurers recorded another $2 billion in reserve deficiencies in 2025.
AM Best’s outlook here is negative, as it is for other liability (occurrence), where more claims and legal costs — and the emergence of new kinds of litigation — have a drag on results though the underwriting loss improved to about $11 billion in 2025 from about $13.7 billion in 2024. Net losses incurred increased to a five-year high of nearly $50 billion thanks to litigation costs, and the combined ratio for 2025 was 114.7. This was an improved result from the 120.3 combined recorded for the prior year as premiums grew faster than losses.