Mortgage Rates In US: Mortgage rates continued their upward trend, rising for the sixth consecutive week, as Treasury yields climbed in the wake of the presidential election. The average 30-year fixed-rate mortgage increased to 6.79%, up from 6.72% the previous week, according to Freddie Mac data. Meanwhile, the average 15-year fixed-rate mortgage remained essentially unchanged at 6%, compared to 5.99% last week.
These increases are closely tied to the movements in 10-year Treasury yields, which have surged in recent weeks. This spike in bond yields follows growing investor confidence that former President Donald Trump’s electoral victory would lead to inflationary policies such as tariffs, which contributed to the rise in borrowing costs.
On Wednesday, bond yields surged an additional 16 basis points following Trump’s victory, before retracting slightly on Thursday, yielding around 4.36%. Despite the recent fluctuations, housing market experts believe that mortgage rates are likely to remain elevated for the foreseeable future.
The Federal Reserve is expected to announce an interest rate cut later today, though this move is not anticipated to have a significant impact on mortgage rates in the coming weeks. Despite this, many economists foresee mortgage rates staying higher for longer. Lisa Sturtevant, chief economist at Bright MLS, forecasts that while rates may eventually dip, they are likely to remain volatile and above 6% throughout 2024.
Higher rates are also having a noticeable impact on housing market activity. For the sixth week in a row, mortgage applications to purchase homes declined, dropping 5% from the previous week. Refinance applications were down by 19%. According to Sam Khater, chief economist at Freddie Mac, “It is clear that purchase demand is very sensitive to mortgage rates in the current market environment,” with a notable 10% drop in home purchase applications over the last month.
As homebuyers face rising borrowing costs and housing affordability challenges, many experts predict that these trends will continue to shape the real estate landscape in the months ahead.
