Average rate on a 30-year mortgage climbs to highest level in 13 months
The average interest rate for the U.S. benchmark 30-year fixed-rate mortgage rose to its highest level in over a year, reaching 6.71% as reported by Freddie Mac. This increase follows continued upward pressure on borrowing costs due to inflation and geopolitical tensions with Iran that have driven up oil prices. The rise in rates is expected to further strain homebuyers' purchasing power and contribute to sluggish housing market activity. The average rate for 15-year fixed-rate mortgages also increased, reaching 6.04%. Mortgage rates are closely tied to the yield on 10-year Treasury bonds, which has risen significantly this year due to inflation concerns and U.S.-Iran tensions. The latest bond yields stood at 4.74%, up from earlier in the week. Federal Reserve Chair Kevin Warsh indicated that more rate hikes may be necessary if inflation remains elevated beyond current expectations. Analysts warn of continued pressure on housing affordability as mortgage rates remain high, with no relief expected this fall.
Topics: bond market Federal Reserve inflation mortgage rates