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Mortgage rates rose for the seventh straight week, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage rose to 7.4% from last week’s reading of 7.28%.
The average rate on a 30-year loan was 6.3% a year ago.
Realtor Russell Walsh takes a look at a listing by realtor Bryce Garman at Garman’s open house in Dana Point, California, on Aug. 1, 2024. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images / Getty Images)
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“This increase comes amid continued upward pressure from the 10-year Treasury yield, which averaged 5.28% this week, 9 basis points higher than the week before,” said Realtor.com senior economist Joel Berner. “A wicked brew of inflation expectations, a broad bond market selloff, and rising fiscal deficits requiring new debt issuance is pushing bond yields higher, and mortgage rates are following.”
The average rate on a 15-year fixed mortgage climbed to 6.73% from last week’s reading of 6.6%.
Mortgage rates are affected by several factors, including the Federal Reserve and geopolitics. Though mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield hovered around 5.22% as of Thursday afternoon.
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Berner said the high rates “have the housing market spooked.”
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“Pending home sales fell year over year in both August and September even before rates crossed the 7% threshold, and sellers have been forced to cut prices at a rate not seen in four years,” he said. “The increased costs of financing a home purchase have discouraged buyers already squeezed by affordability constraints, but those able to buy in cash are experiencing very favorable conditions, with prices down 1.4% year over year and for-sale inventory up 5.4% year over year.”
