LOS ANGELES (AP) — The average rate on a 30-year mortgage moved back above 7% this week, a setback for home shoppers at a time when the U.S. housing market is already slowing under the strain of elevated home loan borrowing costs and rising prices.
The rate rose to 7.03% from 6.94% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.79%.
This is the first increase after a three-week pullback. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing up the average rate to 6.36% from 6.24% last week. A year ago, it averaged 6.18%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.