Average long-term US mortgage rate rises modestly this week, holding just below 7%
The average long-term U.S. mortgage rate rose modestly this week, holding below 7% as it has for much of this year
LOS ANGELES — The average long-term U.S. mortgage rate rose modestly this week, holding below 7% as it has for much of this year.
The average rate on a 30-year mortgage rose to 6.82% from 6.79% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.28%.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans.
Rates have been drifting higher and lower in recent weeks, often from one week to the next. The average rate for the benchmark 30-year mortgage is now just below where it was two weeks ago.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, though it also hasn't gone below the 6.6% it averaged in January.
In late February, it got up as high as 6.94% after stronger-than-expected reports on inflation, the job market and the economy clouded the outlook for when the Federal Reserve may begin lowering its short-term interest rate.
Many economists expect that mortgage rates will ease moderately this year, but that’s not likely to happen before the Fed begins cutting its benchmark interest rate. Last month, the central bank signaled again that it expects to make three rate cuts this year, but not before it sees more evidence that inflation is slowing from its current level just above 3%.
How the bond market reacts to the Fed’s interest rate policy, as well as other factors can influence mortgage rates. Current indications are mortgage rates will remain higher for a while
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