Mortgage Rates Squeeze Buyers

Mortgage rates climbed for a fifth consecutive week, reaching their highest level in slightly more than a year and adding another affordability challenge for homebuyers in the Coachella Valley and across the country.

The average rate on a 30-year fixed-rate mortgage rose to 6.69% for the week ending August 6, up from 6.66% one week earlier, according to Freddie Mac. The rate has increased steadily from 6.43% in early July and is now at its highest point since late July 2025.

A year ago, the average was 6.63%.

The average rate on a 15-year fixed mortgage, often selected by homeowners refinancing their loans, moved in the opposite direction. It declined to 6.01% from 6.04% the previous week, but remained above the 5.75% average recorded one year ago.

Although the latest increase in the 30-year rate was small, five consecutive increases can significantly affect household budgets. Mortgage rates do not move directly with the Federal Reserve’s short-term interest rate. Instead, they tend to follow the 10-year Treasury yield, which responds to inflation expectations, government borrowing, economic conditions and global risks.

Higher energy prices and renewed inflation concerns have recently pushed bond yields upward, contributing to the rise in mortgage costs.

The effect is especially important in Greater Palm Springs, where home prices remain high despite a slower and more balanced market.

The median price of a detached Coachella Valley home was $650,000 in July, unchanged from a year earlier, according to the latest Greater Palm Springs Realtors housing report. With a 20% down payment, a buyer would finance approximately $520,000.

At 6.69%, the principal-and-interest payment on that loan would be about $3,352 a month. At the 6.43% average recorded five weeks earlier, the payment would have been approximately $3,263. That is a difference of nearly $90 a month, or more than $1,000 a year, before property taxes, insurance, homeowners association dues or other expenses are included.

Compared with the 5.98% rate available in late February, the difference is approximately $241 a month.

Local market conditions may provide buyers with some negotiating room. Detached homes sold for an average of 3.1% below their asking prices in July, while attached homes sold at an average discount of 3.5%. The Valley had 2,668 homes available at the end of the month, and properties spent a median of 52 days on the market.

Sales, however, remained below historical norms. The three-month average was 608 transactions, compared with 616 a year earlier.

For sellers, higher rates can reduce the number of qualified buyers or force buyers into lower price ranges. For prospective homeowners, the latest increase makes comparison shopping, evaluating lender fees and negotiating seller-paid closing costs increasingly important.

Rates can change quickly, and the Freddie Mac figure is a national average rather than a guaranteed offer. A borrower’s actual rate will depend on credit history, down payment, loan size, property type and lender terms.