The average 30-year mortgage rate has hit 7%, marking its fifth consecutive increase and the highest level in eight months.
Los Angeles: So, the average rate for a 30-year mortgage just climbed to over 7%. That’s the highest it’s been in eight months, and it’s the fifth week in a row that it’s gone up.
Last week, it was at 6.93%, but now it’s at 7.04%. Just a year ago, it was around 6.6%. Even the 15-year fixed-rate mortgages are seeing a rise, now at 6.27% from 6.14% last week.
This increase is tied to rising bond yields, especially the U.S. 10-year Treasury yield, which jumped from 3.62% in mid-September to 4.61% recently. Higher mortgage rates mean higher monthly payments, which is making homebuyers think twice.
Because of this, home sales have been sluggish since 2022. Even though sales of previously occupied homes went up in November, the market is still expected to have its worst year for sales since 1995.
Interestingly, the last time the 30-year mortgage rate was this high was back in May, when it hit 7.09%. The Federal Reserve has been raising rates, expecting to do it a couple more times this year, which is a change from their earlier forecast.
They’re being cautious because inflation is still above their 2% target, even if it’s come down from its peak last year. Plus, there are concerns about how President-elect Donald Trump’s economic plans might affect inflation, especially with his ideas about increasing tariffs.
