Please ensure Javascript is enabled for purposes of website accessibility
Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July
gvw_ap_news
By Associated Press
Published 6 months ago on
November 21, 2024

Mortgage rates inch closer to 7%, reaching highest level since July, impacting homebuyers' purchasing power. (AP File)

Share

Getting your Trinity Audio player ready...

The average rate on a 30-year mortgage in the U.S. edged closer to 7% this week, climbing to its highest level since July.

The rate rose to 6.84% from 6.78% last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.29%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also ticked up this week. The average rate rose to 6.02% from 5.99% last week. A year ago, it averaged 6.67%, Freddie Mac said.

Rising Rates Impact Homebuyers’ Purchasing Power

When mortgage rates increase they can add hundreds of dollars a month in costs for borrowers, reducing homebuyers’ purchasing power at a time when home prices remain near all-time highs, even though U.S. home sales are on track for their worst year since 1995.

The average rate on a 30-year mortgage fell to a two-year low of 6.08% in late September but it’s been mostly rising since then, echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

The yield, which has mostly hovered around 4.4% since last week and was below 3.70% in September, has been rising in recent weeks following mixed reports on inflation and the economy. It also surged after the presidential election, reflecting expectations among investors that President-elect Donald Trump’s proposed economic policies may widen the federal deficit and crank up inflation.

Federal Reserve’s Impact on Mortgage Rates

Mortgage rates slid to just above 6% in September following the Federal Reserve’s decision to cut its main interest rate for the first time in more than four years. While the central bank doesn’t set mortgage rates, its actions and the trajectory of inflation influence the moves in the 10-year Treasury yield. The central bank’s policy pivot is expected to eventually clear a path for mortgage rates to generally go lower. But that could change if the next administration’s policies send inflation into overdrive again.

September’s pullback in mortgage rates helped drive a pickup in sales of previously occupied U.S. homes last month. However, the recent climb in rates has put a damper on the housing market in the near term, said Hannah Jones, senior economic research analyst at Realtor.com.

“Mortgage rates reached the high-6% range in late October, and have remained elevated since, much to the disappointment of buyers hoping to find some relief in the late-fall housing market,” she said.

Forecasting Mortgage Rate Trends

Forecasting the trajectory of mortgage rates is difficult, given that rates are influenced by many factors, from government spending and the economy, to geopolitical tensions and stock and bond market gyrations.

Economists predict that mortgage rates will remain volatile this year, but generally forecast them to hover around 6% in 2025.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

UP NEXT

Fresno Police Arrest Felon on Probation After Finding Concealed Gun

2 Israeli Embassy Staffers Killed in Shooting Near DC Jewish Museum

37 minutes ago

Senate Votes to Block California’s Rule Banning the Sale of New Gas-Powered Cars by 2035

41 minutes ago

CA State Senator Cited for Suspicion of Impaired Driving, Says She Wasn’t Intoxicated

SACRAMENTO — A California state lawmaker denied having any alcohol and drugs in her system after Sacramento police cited her earlier this we...

27 minutes ago

27 minutes ago

CA State Senator Cited for Suspicion of Impaired Driving, Says She Wasn’t Intoxicated

32 minutes ago

Kim Kardashian Dons a Graduation Cap and Marches Closer to Becoming a Lawyer

36 minutes ago

Multiple People on Private Plane That Crashed Into San Diego Neighborhood Are Dead

Flowers in Memory of slain Jewish Embassy staff members
37 minutes ago

2 Israeli Embassy Staffers Killed in Shooting Near DC Jewish Museum

41 minutes ago

Senate Votes to Block California’s Rule Banning the Sale of New Gas-Powered Cars by 2035

58 minutes ago

Split US Supreme Court Blocks Taxpayer-Funded Religious Charter School

1 hour ago

Colts Owner Jim Irsay Remembered for Love of Football, Commitment to Music, Animal Welfare

2 hours ago

Thunder’s Gilgeous-Alexander Wins First NBA MVP Award

Help continue the work that gets you the news that matters most.

Search

Send this to a friend