The average rate on a 30-year mortgage in the U.S. climbed this week to its highest level since mid-February, a setback for home shoppers that threatens to slow sales further this spring homebuying season.
The rate increased to 6.86% from 6.81% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.94%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate ticked up to 6.01% from 5.92% last week. It’s down from 6.24% a year ago, Freddie Mac said.
Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations about the economy and inflation.
The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, which it set in mid-January. The average rate’s low point so far was five weeks ago, when it briefly dropped to 6.62%. It’s now at its highest level since Feb. 13, when it averaged 6.87%.
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers, leading to a lackluster start to the spring homebuying season, even as the inventory of homes on the market is up sharply from last year. Sales of previously occupied U.S. homes fell last month to the slowest pace for the month of April going back to 2009.
