Average U.S. mortgage rates rose again this week, remaining at their highest level since July.
The benchmark 30-year fixed rate rose to 6.93% from 6.91% last week, according to mortgage giant Freddie Mac. A year ago it was 6.66%. It has risen for four weeks in a row.
The rise in home loan costs reflects a rise in bond yields that lenders use to guide mortgage pricing, particularly the yield on 10-year U.S. Treasury bonds. The yield on ten-year government bonds has risen from 3.62% in mid-September to 4.66% this week.
The increase is taking place as the price of houses steadily rises.
Higher mortgage rates and rising home prices have put homeownership out of reach for many potential homebuyers. While sales of previously occupied U.S. homes rose for the second straight month in November, the housing market remains in a slump and is on track for its worst year since 1995.
The government’s report on December house sales will be released later this month.
Interest rates have been rising since the Federal Reserve said last month that it expects to raise rates only twice this year, down from the four cuts it forecast in September.
The Fed is pumping the brakes on rate cuts as inflation remains stubbornly above the central bank’s 2% target, even as it has fallen from its mid-2022 peak. Economists also worry that the economic policies of the newly elected President Donald Trump, and especially his plan to massively increase import duties, could fuel inflation.
The average interest rate on a 15-year fixed-rate mortgage, popular with homeowners looking to refinance, rose to 6.14%, up from 6.13% and also the highest since July. A year ago it was 5.87%, Freddie Mac said.
