WASHINGTON (Reuters) – U.S. mortgage interest rates rose to their highest levels in six months this week, a trend that combined with rising home prices could further squeeze potential buyers out of the market.
Mortgage financing agency Freddie Mac said Thursday that the average interest rate on a 30-year fixed-rate mortgage rose to 6.93%, the highest level since early July, from 6.91% last week. It averaged 6.66% during the same period last year.
Mortgage interest rates rose despite the Federal Reserve cutting its interest rate by 100 basis points last year after it began an easing cycle in September. They tracked U.S. Treasury yields, which rose amid economic resilience and investor concerns that President-elect Donald Trump’s proposed policies, including tax cuts, increased tariffs on imported goods and mass deportations, could stoke inflation.
“The continued strength of the economy has put upward pressure on mortgage rates and, along with rising home prices, continues to impact housing affordability,” said Sam Khater, chief economist at Freddie Mac. “Lack of supply at the entry level also remains an issue, especially for those looking to become first-time homeowners.”
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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