Mortgage rates rise in UK and US housing markets

Mortgage rates are rising significantly in both the United Kingdom and the United States, placing increased pressure on housing affordability.

In the United Kingdom, the average five-year fixed mortgage rate has reached 6%, the highest level in over three years. Data from Moneyfacts indicates a sharp decline in available low-interest options, with the number of mortgage deals offering rates below 5% dropping by 99% since the start of September. This rise is attributed to increasing swap rates, higher government bond yields, and inflation expectations. Consequently, the UK housing market is showing signs of slowing, with Nationwide Building Society reporting that annual house price growth fell to 0.8% in September.

In the United States, the benchmark 30-year fixed mortgage rate climbed to 7.28% in early October, up from 7.03% in late September. According to Freddie Mac, this represents one of the highest levels since 2023. Economists note that these increases add hundreds of dollars to monthly principal and interest payments for average homebuyers. Factors influencing these US rates include 10-year Treasury yields and economic instability linked to energy price fluctuations.