Average long-term US mortgage rate inches back up to 6.81%

abcnews.go.com:

The average long-term U.S. mortgage rate ticked back up this week, remaining a barrier for Americans trying upgrade or buy their first home

The average long-term U.S. mortgage rate ticked back up this week, remaining a barrier for Americans trying to upgrade or buy their first home.

The average rate on the benchmark 30-year home loan rose to 6.81% this week from 6.78% last week, which was the lowest level in a month, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 5.3%.

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.

High inflation has driven the Federal Reserve to jack up interest rates since early last year. Beginning with its first hike in March 2022, the central bank has lifted its benchmark interest rate to between 5.1% and 5.3%, its highest level in 22 years.

Inflation has retreated since last summer, which has many on Wall Street hoping that the Federal Reserve’s quarter-point interest rate hike on Wednesday will the the last of this cycle.

Mortgage rates don’t necessarily mirror the Fed’s rate increases, but tend to track the yield on the 10-year Treasury note. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

The average rate on a 30-year mortgage remains more than double what it was two years ago, when ultra-low rates spurred a wave of home sales and refinancing. The far higher rates now are contributing to a dearth of available homes. Homeowners who locked in those lower borrowing costs two years ago are reluctant to sell and jump into a higher rate on a new property.

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