The average rate on a 30-year U.S. mortgage edged up this week, ending a five-week decline in borrowing costs for homebuyers.
The long-term rate ticked up to 6.72% from 6.67% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.89%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate increased to 5.86% from 5.80% last week. A year ago, it was 6.17%, Freddie Mac said.
High mortgage rates can add hundreds of dollars a month in costs for borrowers and reduce their purchasing power. That's helped keep the U.S. housing market in a sales slump that dates back to 2022, when mortgage rates began to climb from the rock-bottom lows they reached during the pandemic.
Last year, sales of previously occupied U.S. homes sank to their lowest level in nearly 30 years. They've remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have continued to climb, albeit more slowly.
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. The yield was at 4.37% at midday Thursday, up from 4.34% late Wednesday.
Yields moved up last week as traders bet that a better-than-expected June jobs report could keep the Fed on hold when it comes to interest rates.
