U.S. mortgage rates continued to climb, with the average 30-year fixed mortgage reaching 6.76%—the highest level in more than 14 months.
According to Freddie Mac, the benchmark rate increased from 6.71% the previous week and 6.35% a year earlier. The average 15-year fixed mortgage rate also rose to 6.09%, further increasing borrowing costs for homeowners and prospective buyers.
Higher mortgage rates continued to weigh on housing affordability by increasing monthly payments and reducing purchasing power. The elevated costs also encouraged some buyers to delay purchases, contributing to continued weakness in existing-home sales.
The rise in mortgage rates was tied to higher Treasury yields and persistent inflation concerns. The 10-year Treasury yield reached 4.92%, its highest level since late 2023, as markets assessed inflation, government debt, and expectations for Federal Reserve policy.
With inflation remaining elevated, expectations of further Fed action added uncertainty to the outlook for borrowing costs. While the Federal Reserve does not directly set mortgage rates, changes in its policy can influence bond yields that help determine home loan pricing.
For the housing market, the latest increase reinforced the affordability challenges facing buyers and added another headwind to a market that has remained subdued since mortgage rates moved sharply higher after the pandemic.
As borrowing costs remained elevated, housing demand continued to face pressure, keeping affordability and mortgage rates at the center of the U.S. housing market outlook.
Source: Associated Press
