This is the fourth week in a row that mortgage rates have moved higher. The average rate hasn\u2019t reached this level since Jan. 30, 2025.<\/p>\n
Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 6.26 percent from 6.09 percent last week. A year ago, it was at 5.41 percent.<\/p>\n
Higher mortgage rates can add hundreds of dollars a month to borrowers\u2019 costs, limiting homebuyers\u2019 purchasing power. As rates rise, that can also lead prospective home shoppers to delay buying.<\/p>\n
In late February, the average rate on a 30-year mortgage briefly dipped to 5.98 percent, its lowest level going back to late 2022. The nearly 1 percentage point increase in the rate since then translates roughly into an additional $255 a month cost for a borrower financing a $400,000 home loan at the current average rate.<\/p>\n
The housing market has been stuck in a rut this year in large part because of rising borrowing costs, as mortgage rates have kept marching higher in the months since the war between the US and Iran began in late February. Expectations of higher inflation amid surging oil prices have pushed up the long-term bond yields that lenders use as a guide to pricing home loans, driving mortgage rates higher.<\/p>\n
Mortgage rates are influenced by inflation, Federal Reserve policy, and bond-market investors\u2019 expectations for the economy, among other factors. They generally follow the trajectory of the 10-year Treasury yield. That yield, which was at 3.97 percent in late February, before the war began, breached 5 percent on Monday for the first time since 2023. It was at 4.94 percent at midday trading on the bond market Thursday.<\/p>\n
Meanwhile, the Federal Reserve\u2019s decision Wednesday to increase its key interest rate for the first time in three years in a bid to tame surging inflation could also put upward pressure on mortgage rates.<\/p>\n
While the central bank doesn\u2019t set mortgage rates, its decisions to raise or lower its short-term rate are watched closely by bond investors and can ultimately affect the yield on 10-year Treasurys. The Fed also signaled Wednesday that another rate hike could occur later this year.<\/p>\n
\u201cThe rate hike all but guarantees that mortgage rates will remain stuck at or above the 7 percent threshold, which creates a psychological and financial barrier that will sharply squeeze affordability and sideline even more prospective buyers,\u201d said Lisa Sturtevant, chief economist at Bright MLS.<\/p>\n
The US housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied US homes were essentially flat last year, stuck at a 30-year low. US sales of those homes slowed again last month.<\/p>\n
And the latest monthly tally of home purchase transactions that have yet to be finalized points to potentially more sluggish home sales in coming months.<\/p>\n
Pending US home sales inched up 0.3 percent last month from July and fell 4.7 percent from August last year, the National Association of Realtors said Thursday. There\u2019s usually a month or two lag between a contract signing and when the sale is finalized, which makes pending home sales a near-term bellwether for the housing market.<\/p>\n
A sharp run-up in home prices, especially in the early years of this decade, and a chronic shortage of homes nationally worsened by years of below-average home construction have left many aspiring homeowners priced out of the market.<\/p>\n
That has many would-be homebuyers keeping an eye on mortgage rates, which can boost home shoppers\u2019 purchasing power when they come down, but also reduce how much homebuyers can afford when rates rise.<\/p>\n
Depending on a borrower\u2019s income, credit, and other factors, they may qualify for a rate on a 30-year mortgage that is below or above the current average.<\/p>\n
The Fed rate hike and other factors already driving up mortgage rates this year could set the stage for a further slowing in the housing market this year.<\/p>\n
Still, it\u2019s not clear how much mortgage rates will move up from here, as their rise in recent weeks may already reflect, at least in part, expectations that the Fed would elect to begin hiking interest rates.<\/p>\n
\u201cThat matters because it tells us how mortgage rates and the bond market might respond to potential Fed hikes,\u201d said Jake Krimmel, senior economist at Realtor.com.<\/p>\n","protected":false},"excerpt":{"rendered":"This is the fourth week in a row that mortgage rates have moved higher. The average rate hasn\u2019t…\n","protected":false},"author":2,"featured_media":851586,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,8876,109,101,793,2402,149,9399,795],"class_list":["post-851585","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economic-indicators","tag-economic-policy","tag-economy","tag-general-news","tag-inflation","tag-lifestyle","tag-mortgages","tag-u-s-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/851585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=851585"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/851585\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/851586"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=851585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=851585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=851585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}