NEW YORK (AP) — The average rate on the benchmark 30-year home loan rose for the seventh straight week, creating an increasingly high bar to home ownership for Americans.
The rate on the 30-year fixed mortgage is at 7.79%, up from 7.63% last week, Freddie Mac said Thursday. A year ago the rate was 7.08%.
As mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in far low rates two years ago, when they were around 3%, from selling.
The rate on the 15-year loan rose to 7.03% from 6.92%. A year ago the rate on the loan, which is popular with homeowners their home loan, was at 6.36%.
"Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory,” said Freddie Mac chief economist Sam Khater.
The high rates are limiting applications for new mortgages. Wednesday the Mortgage Bankers Association repoted that applications for new loans dipped to the slowest weekly pace since 1995. Meanwhile, the share of applications for adjustable rate mortgages rose to 9.5%, the higher since November.
Mortgage rates have been climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
The threat of higher rates for longer pushed Treasury yields this week to their highest levels in more than a decade. The 10-year Treasury yield hit 5% earlier this week and was at 4.89% in midday trading Thursday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.
