Average US mortgage rates surge to new high

The 30-year mortgage hit the highest rate of the year to date

Average US mortgage rates surge to new high

The 30-year mortgage surged 10 basis points this week to the highest level so far this year, ramping up pressure on prospective buyers.

Freddie Mac reported Thursday that the benchmark 30-year fixed-rate loan climbed to 6.81% from 6.71% last week.

“Mortgage rates continued their upward trajectory again this week, rising to the highest rate this year so far,” said Sam Khater, Freddie Mac’s chief economist.

The 15-year fixed mortgage rate averaged 6.24%, an 18 basis-point jump from a week ago and up from 4.45% this time last year. This week’s spike in interest rates dampened mortgage application activity, which fell to its lowest level in a month, according to the Mortgage Bankers Association.

“This upward trend is being driven by a resilient economy, persistent inflation, and a more hawkish tone from the Federal Reserve,” Khater said. “These high rates, combined with low inventory, continue to price many potential homebuyers out of the market.”

“Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country,” added MBA deputy chief economist Joel Kan. “However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”

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