Average rate on a 30-year mortgage hits the highest level in months

The average rate for a 30-year fixed-rate mortgage has climbed to 6.58% this week. This marks the third consecutive weekly increase and the highest level seen in nearly 12 months for prospective homebuyers.

Rising costs are tied closely to the 10-year Treasury yield, which lenders track when pricing home loans. Increased oil prices and ongoing global conflicts have sparked market expectations of higher inflation, pushing bond yields up and making borrowing more expensive for individuals.

While mortgage rates remain lower than the 6.74% average recorded one year ago, the recent upward trend is cooling activity in the housing market. Potential buyers face a difficult environment as high home prices and elevated interest rates reduce total purchasing power, leading many to pause their home-buying plans.

Economists note that the financial strain on households extends beyond interest rates. With inflation concerns remaining prevalent, the current market shows fewer sales than the long-term historical average, keeping the housing sector in a persistent slump that began in 2022.