WASHINGTON (Reuters) – U.S. mortgage rates rose to a new six-month high this week, a trend that, along with rising home prices, could further squeeze potential buyers out of the market.
The average rate on the popular 30-year fixed-rate mortgage rose to 6.93%, the highest level since early July, from 6.91% last week, the mortgage finance agency Freddie Mac (OTC:) said Thursday. In the same period a year ago, it averaged 6.66%.
Mortgage rates rose despite the Federal Reserve cutting its benchmark rate by 100 basis points last year after starting an easing cycle in September. They tracked U.S. government bond yields, which rose on economic resilience and investor concerns that President-elect Donald Trump’s proposed policies, including tax cuts, higher tariffs on imported goods and mass deportations, could fuel inflation.
“The continued strength of the economy has put upward pressure on mortgage rates, and coupled with high home prices, continues to weigh on housing affordability,” said Sam Khater, chief economist at Freddie Mac. “The lack of entry-level supply also remains an issue, particularly for first-time home owners.”
