The average long-term U.S. mortgage rate climbed this week to its highest level in more than three months, a setback for prospective home shoppers this spring homebuying season.
The benchmark 30-year fixed rate mortgage rate rose to 6.22% from 6.11% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.67%.
Only three weeks ago, the average rate had dropped to just under 6% for the first time since late 2022, but it has risen every week since the war with Iran started, rattling financial markets and stoking worries about higher inflation due to a spike in energy prices.
Meanwhile, borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. That average rate inched up to 5.54% from 5.5% last week. A year ago, it was at 5.83%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The 10-year Treasury yield was at 4.27% at midday Thursday, up from around 4.13% a week ago.
