U.S. Mortgage Rates Rise to Six-Month High

WASHINGTON (Reuters) – U.S. mortgage rates increased to a fresh six-month high this week, a trend that could further squeeze potential buyers from the market due to elevated house prices.

The average rate on the popular 30-year fixed-rate mortgage climbed to 6.93%, the highest level since early July, up from 6.91% last week, according to mortgage finance agency Freddie Mac (OTC:FMCC). The average during the same period a year ago was 6.66%.

Mortgage rates have risen despite the Federal Reserve cutting its policy rate by 100 basis points last year, starting its easing cycle in September. These rates have tracked U.S. Treasury yields, which have surged amid economic resilience and investor concerns regarding President-elect Donald Trump’s proposed policies, such as tax cuts, higher tariffs on imported goods, and mass deportations that could inflate prices.

“The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability,” said Sam Khater, chief economist at Freddie Mac. “The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners.