WASHINGTON (Reuters) – U.S. mortgage rates rose to a new six-month high this week, a trend that, along with soaring home prices, could further drive potential buyers out of the market.
The average rate on the popular 30-year fixed-rate mortgage rose to 6.93%, the highest level since early July, from 6.91% last week, mortgage finance agency Freddie Mac said Thursday. . It averaged 6.66% during the same period a year ago.
Mortgage rates have risen even though the Federal Reserve cut its policy rate by 100 basis points last year after starting its easing cycle in September. They have followed U.S. Treasury yields, which have risen amid economic resilience and investor concerns that President-elect Donald Trump’s proposed policies, including tax cuts, higher tariffs on imported goods and massive deportations, could fuel inflation.
“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 basic supply also remains an issue, especially for those looking to become first-time homeowners.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)