The average long-term U.S. mortgage rate drew closer this week to 6.5%, pushing up borrowing costs for prospective homebuyers.
The benchmark 30-year fixed rate mortgage rate rose to 6.49% from 6.43% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.72%.
When mortgage rates rise they can add hundreds of dollars a month in costs for borrowers, reducing their purchasing power.
Mortgage rates have remained elevated after the average rate on a 30-year loan briefly dropped below 6% in February, then climbed in May . The uptick in mortgage rates has
Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 5.82% from 5.79% last week. A year ago, it was at 5.86%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve鈥檚 interest rate policy decisions to bond market investors鈥� 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.
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