The average long-term US mortgage rate rose to 6.49% from 6.43% last week, according to mortgage buyer Freddie Mac. This increase in mortgage rates can add hundreds of dollars a month in costs for borrowers, reducing their purchasing power.

Mortgage Rate Trends

Mortgage rates have remained elevated after briefly dropping below 6% in February for the first time since late 2022. The average rate on a 30-year loan climbed in May to its highest level in nine months, weighing on home sales this year.

Borrowing costs on 15-year fixed-rate mortgages also rose this week, increasing to 5.82% from 5.79% last week. A year ago, it was at 5.86%, Freddie Mac said.

Mortgage rates are influenced by several factors, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Expectations of hotter inflation amid higher crude oil prices have pushed up long-term bond yields, causing mortgage rates to trend higher. The 10-year Treasury yield was at 4.55% at midday Thursday on the bond market, up from 4.49% a week ago.

Sales of previously occupied US homes declined in the first three months of the year compared to a year earlier, extending a nationwide housing slump that dates back to 2022 when mortgage rates began to climb from pandemic-era lows.

Original reporting: KTBS 3 (Shreveport) — read the source article.