The average rate on a 30-year mortgage in the U.S. rose this week to its highest level since early February, further pushing up borrowing costs for homebuyers.
The rate increased to 6.89% from 6.86% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.03%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate ticked up to 6.03% from 6.01% last week. It’s still down from 6.36% a year ago, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. The key barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Bond yields have been trending higher, reflecting bond market investors’ uncertainty over the Trump administration’s ever-changing tariffs policy and worry over exploding federal government debt.
The 10-year Treasury yield was 4.43% in midday trading Thursday, down from 4.47% late Wednesday.
The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, set in mid-January. The average rate’s low point so far was six weeks ago, when it briefly dropped to 6.62%. After rising for three straight weeks, the average rate is now at its highest level since Feb. 6, when it averaged 6.89%.
