Mortgage rates marched higher for the seventh week in a row, driving the average long-term U.S. home loan rate to its highest level in nearly three years.<\/p>\n
The benchmark 30-year fixed-rate mortgage climbed to 7.40% from 7.28% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.30%.<\/p>\n
The average rate is now the highest it\u2019s been since Nov. 16, 2023, when it was at 7.44%.<\/p>\n
The housing market has been stuck in a rut this year<\/a> in large part because of rising mortgage rates, which can add hundreds of dollars a month in costs for borrowers, limiting homebuyers\u2019 purchasing power and prompting many to put off buying a home. <\/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 6.73% from 6.60% last week. A year ago, it was at 5.53%.<\/p>\n Mortgage rates have been climbing in the months since the start of the U.S. war with Iran<\/a> in late February. The recent run-up in rates also reflects heightened bond market<\/a> volatility as surging oil prices due to the war fuel inflation worries.<\/p>\n Rates on home loans 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 The 10-year Treasury yield has risen to its highest level since 2002 because of worries about high inflation<\/a>, big government debt loads and other factors.<\/p>\n The yield was at 5.29% at midday Thursday on the bond market. That’s well above its 3.97% level from before the war with Iran began.<\/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 1.42 percentage point increase in the rate since then translates roughly into an additional monthly cost of $376 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 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