NEW YORK — The average long-term U.S. mortgage rate jumped this week to its highest level in nearly three years.<\/p>\n
The benchmark 30-year fixed-rate mortgage rose to 7.28% from 7.03% last week, mortgage buyer Freddie Mac said Thursday, the biggest leap in several years. A year ago, the average rate was 6.34%.<\/p>\n
It is the sixth consecutive week that mortgage rates have increased.<\/p>\n
The average rate is now the highest it\u2019s been since Nov. 22, 2023, when it reached 7.29%.<\/p>\n
Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also climbed this week. That average rate increased to 6.60% from 6.42% last week. A year ago, it was at 5.55%.<\/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%, its lowest level going back to late 2022. The roughly 1 percentage point increase in the rate since then translates roughly into an additional $276 a month cost for a borrower financing a $400,000 home loan at the current average rate.<\/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 housing market has been stuck in a rut this year<\/a> in large part because of elevated mortgage rates, which have been climbing in the months since the U.S. and Israel attacked Iran<\/a> in late February. <\/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, which lenders use as a guide to pricing home loans. <\/p>\n Expectations of higher inflation<\/a> amid surging oil prices<\/a> have pushed up the 10-year Treasury yield<\/a>, which was at 3.97% in late February, before the war began. It surged to 5.27% in midday trading on the bond market Thursday. That puts it roughly back to where it was in 2007, on the eve of the real estate-induced financial crisis. <\/p>\n High yields slow the overall economy by making it more expensive for everyone to borrow money<\/a>, while undercutting prices for stocks and other investments.<\/p>\n The U.S. housing market has been in a slump<\/a> since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low.<\/a><\/p>\n