Mortgage rates edge higher to nearly 7%

Mortgage rates rose again this week, bad news for Americans seeking to upgrade or buy their first home.

The average rate on the 30-year fixed mortgage ticked up to 6.90% this week, up from 6.81% a week ago, according to data released Thursday by mortgage buyer Freddie Mac. A year ago, the benchmark home loan rate stood at 4.99%. 

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Meanwhile, the average rate on 15-year fixed mortgages, popular with those refinancing their homes, climbed to 6.25% from 6.11% last week. A year ago, it was 4.26%.

The average rate on a 30-year mortgage remains more than double what it was two years ago, when ultra-low rates spurred a wave of home sales and refinancing. Homeowners who locked in those lower borrowing costs two years ago are reluctant to sell and jump into a higher rate on a new property.

High inflation has driven the Federal Reserve to raise its benchmark interest rate 11 times since March 2022. Its fed funds rate has hit the highest level in 22 years.

Mortgage rates don’t necessarily mirror the Fed’s rate increases, but tend to track the yield on the 10-year Treasury note. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

The Associated Press contributed to this report.