The average rate on a 30-year mortgage in the U.S. rose for the fifth straight week, returning to its highest level since early August.
The rate rose to 6.72 percent from 6.54 percent last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.76 percent.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also increased this week. The average rate rose to 5.99 percent from 5.71 percent last week. A year ago, it averaged 7.03 percent, Freddie Mac said.
When mortgage rates increase they can add hundreds of dollars a month in costs for borrowers, reducing homebuyers’ purchasing power.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions and data on inflation and the economy. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields have been rallying following a string of stronger-than-expected reports on the U.S. economy.
“Overall affordability is now at its highest level since August 2022, but the recent jump in rates will likely cause conditions to plateau. MBA is forecasting for rates to be around 6.3 by the end of the year,” Mortgage Bankers Association Associate Vice President Edward Seiler said in a statement Thursday when the association released data showing that the typical monthly mortgage payment among prospective homebuyers last month had fallen slightly, to $2,041.