The average long-term U.S. mortgage rate climbed this week to its highest level in nearly nine months, driving up borrowing costs for homebuyers during what's traditionally the housing market's busiest time of the year.
The benchmark 30-year fixed rate mortgage rate rose to 6.51% from 6.36% last week, mortgage buyer Freddie Mac said Thursday. Despite the sharp increase, the average rate remains below 6.86%, where it was a year ago.
When mortgage rates rise they can add hundreds of dollars a month in costs for borrowers, reducing their purchasing power.
As recently as late February, the average rate on a 30-year mortgage had slipped just under 6% for the first time since late 2022. It's hasn't fallen below that threshold since. It's now at its highest level since August 28, when it was 6.56%.
Meanwhile, borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. That average rate climbed to 5.85% from 5.71% last week. A year ago, it was at 6.01%, 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. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
