The average rate on a 30-year fixed mortgage in the U.S. increased to 6.83%, up from 6.62% the previous week, according to Freddie Mac’s report.
This rise is the highest level recorded since late February.
Why it matters: Rising mortgage rates have the potential to diminish the purchasing power of homebuyers, which could lead to a slowdown in homebuying activities, particularly during the peak homebuying season.
- Mortgage rates are influenced by various factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate decisions, and bond market investors’ predictions of future inflation. These factors contribute to the fluctuations in mortgage rates.
Go deeper: The 15-year fixed-rate mortgages also saw an increase in borrowing costs, with the average rate rising to 6.03% from 5.82% the previous week.
- However, this rate is still lower than the 6.39% recorded a year ago.
- The average rate on a 30-year mortgage typically follows movements in the 10-year Treasury yield, which lenders use as a benchmark to determine home loan prices. The recent spike in the 10-year Treasury yield to 4.5% last week, following a sell-off in government bonds due to tariff war concerns, contributed to the rise in mortgage rates.
