Mortgage rates snap three-week pullback, average rate on 30-year loan back above 7%
The average rate on a 30-year mortgage moved back above 7% this week, a setback for home shoppers at a time when the U.S. housing market is already slowing under the strain of elevated home loan borrowing costs and rising prices
LOS ANGELES — The average rate on a 30-year mortgage moved back above 7% this week, a setback for home shoppers at a time when the U.S. housing market is already slowing under the strain of elevated home loan borrowing costs and rising prices.
The rate rose to 7.03% from 6.94% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.79%.
This is the first increase after a three-week pullback. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing up the average rate to 6.36% from 6.24% last week. A year ago, it averaged 6.18%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields climbed earlier this week on worries about tepid demand for Treasury bonds following several U.S. government auctions and a surprising report showing confidence among U.S. consumers is strengthening. Economists had been expecting it to show a drop in confidence.
The Fed has been holding the federal funds rate at the highest level in more than two decades in hopes of grinding down on the economy enough to get high inflation fully under control. The central bank has maintained it doesn’t plan to cut
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