The average rate for a 30-year mortgage increased to 6.81%, up nearly 1% since September
Interest rate cuts have eased borrowing for credit card, personal loan and auto customers, but mortgage rates remain stubbornly high, making it harder for people to refinance or buy homes.
Mortgage rates have increased 67 basis points in the last five weeks, the fastest rise since 2022, according to the Mortgage Bankers Association (MBA) data released Wednesday.
The average rate for a 30-year mortgage increased to 6.81%, up nearly 1% since September, when the Federal Reserve announced its first rate cut since 2020.
The MBA survey tracks over 75% of all US mortgage applications, reflecting ongoing challenges in the housing market.
Why the rise?
Mortgage rates often follow the 10-year Treasury bond yields, which rise when investors expect stronger economic growth and higher inflation. Recent reports show the economy is doing better than expected, pushing mortgage rates higher.
As a result, fewer people are refinancing their homes, with the refinancing index hitting its lowest level since May.
Home purchase activity also slowed, reaching the lowest level since August.
What to expect?
If the next US administration increases spending, rates could stay high through 2024, making it harder for homebuyers.
Mortgage rates may drop slightly in the next few months but will likely stay around 6% until 2025.