AP Business Writer Alex Veiga
The average US 30-year mortgage rate has surpassed 6.8% this week, returning to where it was just three weeks ago.
Mortgage buyer Freddie Mac said Thursday that the rate rose to 6.81% from 6.76% last week. A year ago, the price averaged 7.02%.
The borrowing costs for 15-year fixed-rate mortgages, which are popular for homeowners to refinance their mortgage, have also risen. The average rate reached up to 5.92% from 5.89% last week. It’s down from 6.28% a year ago, Freddie Mac said.
Mortgage rates are affected by several factors, including the global demand of the US Treasury, the Federal Reserve’s interest rate policy decisions, and bond market investors’ expectations regarding the economy and inflation.
The average 30-year mortgage rate has remained relatively high so far, just above 7% so far, set in mid-January. The previous low average rate point has dropped for a short time to 6.62% five weeks ago.
The rise in mortgage fees that allow borrowers to add hundreds of dollars a month has discouraged home shoppers and has caused the spring home buying season to start badly despite a sharp rise in inventory on the market since last year. Sales of previously occupied US homes fell in March, marking the largest monthly decline since November 2022.
Recent changes in mortgages reflect the volatility of 10-year Treasury yields, which lenders use as a guide to mortgages for pricing.
Yields that mostly fell after rising to around 4.8% in mid-January, surged to 4.5% last month amid the sale of government bonds, sparked by investors’ unrest over the trade war.
Yields eased in weeks but rose above 4.5% earlier this week after the US and China agreed to a 90-day ceasefire in trade disputes. This has raised expectations that the Federal Reserve will not need to cut interest rates as expected this year to protect the economy from tariff damages.
The 2010 Treasury yield was 4.45% in noon trading on Thursday.
Economists expect mortgage rates to remain volatile in the coming months, but they typically want the average 30-year mortgage rate to exceed 6.5% this year.
Original issue: May 15th, 2025, 12:08pm EDT
