WASHINGTON (Reuters) – U.S. mortgage rates rose to a new six-month high this week, a trend that combined with high house prices could further squeeze potential buyers from the market.
The average rate on the popular 30-year fixed-rate mortgage climbed to 6.93%, the highest level since early July, from 6.91% last week, mortgage finance agency Freddie Mac said Thursday. It was 6.66% on average during the same period a year ago.
Mortgage rates have increased despite the Federal Reserve cutting its policy rate by 100 basis points last year after starting its easing cycle in September. They have tracked US Treasury yields, which have risen amid economic resilience and investor concerns that President-elect Donald Trump's proposed policies, including tax cuts, higher tariffs on imported goods and mass deportations, could stifle inflation.
“The continued strength of the economy has put increasing pressure on mortgage rates, and along with high home prices, continues to affect housing affordability,” said Sam Khater, Freddie Mac's chief economist. “The lack of entry-level supply also remains an issue, particularly for those looking to become first-time home owners.”
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)