The average rate on a 30-year mortgage in the U.S. rose again this week, reaching its highest level in nearly three months.
The rate rose to 6.54% from 6.44% last week, mortgage buyer Freddie Mac said Thursday. Despite the recent uptick, the average rate is down from a year ago, when it climbed to a 23-year high of 7.79%.
When mortgage rates increase they can add hundreds of dollars a month in costs for borrowers. The average rate has now risen four weeks in a row. It hasn’t been this high since August 1, when it was 6.73%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also increased this week. The average rate rose to 5.71% from 5.63% last week. A year ago, it averaged 7.03%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions and data on inflation and the economy. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Four weeks ago, the average rate on a 30-year mortgage slipped to 6.08% — its lowest level in two years — after the Federal Reserve cut its main interest rate for the first time in more than four years and signaled further cuts through 2026. While the central bank doesn’t set mortgage rates, its policy pivot cleared a path for mortgage rates to generally go lower.
However, Treasury yields have pushed higher in recent weeks following reports showing the U.S. economy remains stronger than expected. The yield on the 10-year Treasury was at 4.22% Thursday, up from 3.62% in mid-September, just days before the Fed’s rate cut.
“The continued strength in the economy drove mortgage rates higher once again this week,” said Sam Khater, Freddie Mac’s chief economist. “Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy,”
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