Mortgage rates in the United States continued their upward trajectory this week, with the benchmark 30-year fixed rate reaching 6.91%, according to data from Freddie Mac. This marks the highest level since July and represents an increase from 6.85% last week and 6.62% from the same period last year.
The 15-year fixed-rate mortgage also saw an uptick, climbing to 6.13% from 6% last week - another peak not seen since July. This rate stood at 5.89% a year ago.
The rise in mortgage rates aligns with increasing bond yields, which serve as a reference point for lenders when pricing home loans. The Federal Reserve's recent announcement has influenced this trend, as the central bank indicated plans for two rate cuts this year, down from the four cuts projected in September.
The Fed's cautious approach stems from persistent inflation concerns, as rates remain above the central bank's 2% target despite showing improvement from mid-2022 peaks. Market observers note potential additional inflationary pressures from proposed economic policies, including planned increases in import tariffs.
These elevated mortgage rates continue to affect housing market dynamics, impacting both potential homebuyers and homeowners looking to refinance their existing loans.