The current rate for 30-year fixed mortgages has climbed to 6.95%, an increase from 6.76% the previous week, and 15-year mortgage rates also rose to 6.26% from 6.09%, according to Freddie Mac.
Individuals looking for a reprieve from the escalating mortgage rates may find themselves waiting far longer than anticipated.
The weekly average for a 30-year fixed-rate mortgage has been on the rise for several months and has now reached just under 7%, marking the highest point in over 19 months.
The benchmark 30-year fixed loan rate increased to 6.95% from 6.76% just a week ago, as reported by Freddie Mac on Thursday. This time last year, the average was notably lower at 6.26%.
This marks the fourth consecutive week of upward movement in mortgage rates. Rates have not hit this level since January 30, 2025.
The borrowing costs associated with 15-year fixed-rate loans, often preferred by those refinancing, also saw an uptick this week, rising to 6.26% from 6.09% last week; a year earlier, they were much lower at 5.41%.
Increased mortgage rates can lead to hundreds of extra dollars in monthly payments, constraining the purchasing power of homebuyers. Rising rates may also motivate some potential buyers to postpone their home purchases.
This year, the housing market has struggled significantly, largely attributed to rising borrowing costs, which have continued to climb since the onset of conflict involving the U.S. and Iran in late February. Anticipations of rising inflation, in conjunction with surging oil prices, have had a direct effect on the long-term bond yields that ultimately determine mortgage pricing.
Mortgage rates are shaped by various elements including inflation, policies from the Federal Reserve, and the expectations of bond-market investors relating to the overall economy. Generally, these rates tend to mirror the performance of the 10-year Treasury yield, which lenders reference for mortgage pricing. That particular yield, at 3.97% in late February prior to recent conflicts, has now surpassed 5% as of Monday for the first time since 2023 and was tracked at 4.94% during midday trading on Thursday.
Moreover, the Federal Reserve's recent move to raise its key interest rate Wednesday for the first time in three years, aimed at controlling escalating inflation, may further drive mortgage rates upwards.
While the Fed does not directly set mortgage rates, its adjustments to short-term rates are heavily monitored by bond investors, impacting the yield on 10-year Treasurys. The Fed also indicated the potential of another rate increase later in the year.
“This rate increase essentially seals the deal for mortgage rates to remain at or above the 7% level, which creates both a financial and psychological barrier that will severely limit affordability and dissuade even more potential buyers from entering the market,” remarked Lisa Sturtevant, chief economist at Bright MLS.
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