Monday, December 30, 2024
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Average rate on 30-year mortgage in U.S. hits 3-month high

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The rate rose to 6.54% from 6.44% last week, mortgage company Freddie Mac said Thursday

The average rate on a 30-year mortgage in the U.S. rose again this week, hitting its highest level in almost three months.

The rate rose to 6.54% from 6.44% last week, mortgage company Freddie Mac said Thursday. Despite the recent rise, the average rate is down from a year ago, when it jumped to a 23-year high of 7.79%.

When mortgage rates rise they can add hundreds of dollars a month in costs for borrowers. The average rate has now risen four weeks in a row. It hasn’t been this high since August 1, when it was 6.73%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also rose this week. The average rate increased to 5.71% from 5.63% last week. A year ago, it averaged 7.03%, Freddie Mac said.

Four weeks ago, the average rate on a 30-year mortgage slid to 6.08% — its lowest level in two years — after the Fed cut its main interest rate for the first time in over four years and indicated further cuts through 2026. While the central bank does not set mortgage rates, its policy pivot cleared a path for mortgage rates to generally go lower.

However, Treasury yields have pushed higher in recent weeks following reports showing the U.S. economy remains stronger than expected. The yield on the 10-year Treasury was at 4.20% Thursday afternoon. It was at 3.62% in mid-September, just days before the Fed’s rate cut.

The continued strength in the economy drove mortgage rates higher once again this week, according to Sam Khater, Freddie Mac’s chief economist. Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy.

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