Mortgage rates have risen for the fourth week in a row and are closer to 7%
The average 30-year mortgage rate for the week through Wednesday was 6.93%, up from 6.91% a week earlier, according to data from Freddie Mac. The fifteen-year mortgage interest rate rose by one basis point from 6.13% to 6.14%.
The latest jump comes after 10-year Treasury yields, which mirror mortgage rates, rose after new economic data released this week pointed to more persistent inflation and more job openings – both factors complicating the Fed’s rate-cutting path.
The service industry sector grew in December and a measure of their costs rose to near the highest level in two years, the Institute for Supply Management said. Meanwhile, job openings in US industries rose more than economists expected in November.
The figures are the latest sign that the Federal Reserve may opt for fewer interest rate cuts this year. The Fed has no direct control over mortgage rates, but rates typically rise and fall in response to expectations about the central bank’s future policy.
“The continued strength of the economy has put upward pressure on mortgage rates and, along with high home prices, continues to impact housing affordability,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
December jobs data released Friday will provide new information about the direction of interest rates going forward. A weaker payrolls report could strengthen the case for more Fed easing this year.
In response to the higher rates, mortgage applications to purchase new homes fell 7% through Friday compared to a week earlier, the Mortgage Bankers Association said. Refinancing applications rose 2%, although the increase was lower than recent lows, MBA’s deputy chief economist Joel Kan said in a statement.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
