The average rate on a 30-year fixed-rate mortgage rose to 7.40%. It marked the seventh consecutive weekly increase and reached its highest level in nearly three years. Higher borrowing costs significantly limit potential home buyers’ purchasing power.
The increase adds hundreds of dollars to monthly mortgage payments. It also contributes to the slowdown in home sales that has characterized the market throughout the year. The average rate on a 15-year fixed-rate mortgage rose to 6.73%.
Analysts cite bond market volatility, fueled by high inflation concerns and geopolitical tensions, as the primary driver of elevated mortgage rates. Rates typically track the 10-year Treasury yield, which has climbed to its highest level since 2002 amid concerns about inflation and government debt.
Sustained high rates are expected to keep the housing market in a slump, affecting homebuilders, lenders and overall real estate transaction volume.