Average rate on a 30-year mortgage in the US rises to highest level since July

The average rate on a 30-year mortgage in the U.S. edged closer to 7% this week, climbing to its highest level since July.

The rate rose to 6.84% from 6.78% last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.29%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home borrowing to a lower rate, also ticked up this week. The average rate rose to 6.02% from 5.99% last week. A year ago, it averaged 6.67%, Freddie Mac said.

When mortgage rates boost they can add hundreds of dollars a month in costs for borrowers, reducing homebuyers’ purchasing power at a period when home prices remain near all-period highs, even though U.S. home sales are on track for their worst year since 1995.

The average rate on a 30-year mortgage fell to a two-year low of 6.08% in late September but it’s been mostly rising since then, echoing moves in the 10-year Treasury profit, which lenders use as a navigator to pricing home loans.

The profit, which has mostly hovered around 4.4% since last week and was below 3.70% in September, has been rising in recent weeks following mixed reports on worth rise and the economy. It also surged after the presidential election, reflecting expectations among investors that President-elect Donald Trump’s proposed economic policies may widen the federal deficit and crank up worth rise.

Mortgage rates slid to just above 6% in September following the Federal savings’s selection to cut its main profit rate for the first period in more than four years. While the central lender doesn’t set mortgage rates, its actions and the trajectory of worth rise influence the moves in the 10-year Treasury profit. The central lender’s policy pivot is expected to eventually obvious a path for mortgage rates to generally leave lower. But that could transformation if the next administration’s policies send worth rise into overdrive again.

September’s pullback in mortgage rates helped drive a pickup in sales of previously occupied U.S. homes last month. However, the recent climb in rates has put a damper on the housing trade in the near term, said Hannah Jones, elder economic research analyst at Realtor.com.

“Mortgage rates reached the high-6% range in late October, and have remained elevated since, much to the disappointment of buyers hoping to discover some relief in the late-fall housing trade,” she said.

Forecasting the trajectory of mortgage rates is challenging, given that rates are influenced by many factors, from government spending and the economy, to geopolitical tensions and ownership and steady earnings trade gyrations.

Economists forecast that mortgage rates will remain volatile this year, but generally approximate them to hover around 6% in 2025.