Average 30-year mortgage rate climbs to highest level in nearly a year
The average 30-year mortgage rate rose to 6.55% this week, Freddie Mac said. The increase is adding to borrowing costs and reducing purchasing power as inflation concerns push bond yields higher.
The average long-term U.S. mortgage rate climbed this week to its highest level in nearly a year, driving up borrowing costs for prospective homebuyers.
The benchmark 30-year fixed rate mortgage rate rose to 6.55% from 6.49% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.75%.
Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing power at a time when affordability challenges continue to sideline many aspiring homeowners.
The 15-year rate averaged 5.93%, up from last week when it averaged 5.82%. A year ago at this time, the 15-year rate averaged 5.92%
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Rates have been mostly rising this year as the war with Iran has driven higher crude oil prices sharply higher, stoking expectations of hotter inflation. That’s pushed up long-term bond yields relative to where they were before the conflict began in late February, causing mortgage rates to trend higher.
The 10-year Treasury yield was 4.57% at midday Thursday on the bond market, up from 4.54% a week ago. It was just 3.97% in late February, before the war broke out.
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