By ALEX VEIGA, AP Business Writer
The average rate on a 30-year U.S. mortgage edged higher for the second week in a row, though it remains near its low point so far this year.
The average long-term mortgage rate ticked up to 6.24% from 6.22% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.78%.
Just two weeks ago, the average rate was at 6.17%, its lowest level in more than a year.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, edged lower this week. The rate averaged 5.49%, down from 5.5% last week. A year ago, it was 5.99%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to 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.
The 10-year yield was at 4.10% at midday Thursday, up slightly from a week ago.
When mortgage rates rise they reduce homebuyers’ purchasing power. The average rate on a 30-year mortgage has been stuck above 6% since September 2022, the year mortgage rates began climbing from historic lows. The housing market has been in a slump ever since.
Sales of previously occupied U.S. homes sank last year to their lowest level in nearly three decades. Sales have been sluggish this year, but accelerated in September to their fastest pace since February as mortgage rates eased.
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Applications for loans to buy a home jumped nearly 6% last week to their strongest pace since September, even as mortgage rates ticked higher, according to the Mortgage Bankers Association.
The late-summer pullback in mortgage rates has also benefited homeowners eager to refinance their current home loan to a lower rate. Applications for mortgage refinancing loans accounted for about 56% of all mortgage applications last week, down slightly from the previous week.
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