A 30-year mortgage rate in the U.S. went up a little this week to just above 7%, which is the highest number in eight months.
Freddie Mac, a company that buys mortgages, said Thursday that the rate went up from 6.93% to 7.04%. It was 6.6% on average a year ago. It has been going up for five weeks in a row.
This week, the costs of borrowing money for 15-year fixed-rate mortgages went up as well. These mortgages are popular with people who want to refinance their home loan to a lower rate. The average rate went up from 6.14% last week to 6.27% this week. Freddie Mac said it was 5.76 percent on average a year ago.
An increase in the return on the U.S. 10-year Treasury bond, which lenders use to set mortgage rates, is what caused the cost of home loans to go up. The 10-year Treasury yield has gone up from 3.62% in the middle of September to 4.61% as of Thursday noon.
High mortgage rates, which can cost borrowers hundreds of dollars a month, have turned people off from buying homes, extending a national drop in home sales that began in 2022.
In November, sales of previously owned houses in the U.S. went up for the second month in a row. However, 2024 was still on track to be the worst year for sales in 2024 since 1995. Next week, sales numbers for the whole year will be released.
A 30-year mortgage rate is now at 7.09%, which is the highest it has been since May 9.
Since the Federal Reserve said last month that it only plans to raise its benchmark rate twice this year, instead of the four cuts it predicted in September, interest rates have been going up.
Rate cuts are being put on hold by the Federal Reserve because inflation is still above the central bank’s 2% goal, even though it has gone down since its high point in mid-2022. Economists also worry that President-elect Donald Trump’s economic policies, especially his plan to put a lot more taxes on imports, could make prices go up.
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