Average long-term US mortgage rate climbs to 7.09% this week to highest level in more than 20 years
The average long-term U.S. mortgage rate jumped this week to its highest level in 20 years, grim news for would-be homebuyers already facing high home prices caused a lack of supply
The average long-term U.S. mortgage rate climbed this week to its highest level in more than 20 years, pushing up borrowing costs for homebuyers already challenged by a housing market that remains competitive due to a dearth of homes for sale.
Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 7.09% from 6.96% last week. A year ago, the rate averaged 5.13%.
It’s the fourth consecutive weekly increase for the average rate and the highest since early April 2002, when it averaged 7.13%. The last time the average rate was above 7% was last November, when it stood at 7.08%.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans.
The latest increase in rates follows a sharp uptick in the 10-year Treasury yield, which has been above 4% this month and climbing. The yield, which lenders use to price rates on mortgages and other loans, was at 4.30% in midday trading Thursday, it’s highest level in nearly a year.
The yield has been rising as bond traders react to more reports showing the U.S. economy remains remarkably resilient, which could keep upward pressure on inflation, giving the Federal Reserve reason to keep interest rates higher for longer.
“The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb,” said Sam Khater, Freddie Mac’s chief economist. “Demand has been impacted by affordability headwinds, but low inventory
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