US 30-Year Mortgage Rate Rises to 6.34%, Marking Second Consecutive Weekly Increase

The average rate for a 30-year fixed mortgage in the United States has risen to 6.34%, up from 6.3% the previous week, according to Freddie Mac. This marks the second consecutive weekly increase, following a period of declines that had brought rates to their lowest levels in nearly a year. A year ago, the average rate stood at 6.12%.

Mortgage rates are influenced by various factors, including the Federal Reserve's interest rate policies and bond market investors' expectations regarding the economy and inflation. They typically follow the trajectory of the 10-year Treasury yield, which lenders use as a benchmark for pricing home loans.

The 10-year Treasury yield was at 4.10% at midday Thursday, down from 4.19% the same time last week. Much of that decline has occurred in the past few days, driven by discouraging reports on the U.S. economy, particularly the job market.

In late July, mortgage rates began declining in anticipation of the Federal Reserve's decision last month to cut its main interest rate for the first time in a year amid growing concerns over the U.S. job market. However, Fed Chair Jerome Powell has since signaled a cautious approach to future interest rate cuts. This contrasts with other members of the Fed's rate-setting committee, particularly those appointed by President Donald Trump, who are advocating for faster cuts.

The housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. So far this year, sales are running below where they were at this time in 2024.

The second consecutive increase in rates could signal a repeat of last year's pattern following the Fed's rate cut. After an initial decline, mortgage rates began rising again, eventually reaching just above 7% in mid-January this year.

Despite the recent uptick, the late-summer decline in mortgage rates has encouraged many homeowners who purchased in recent years, when rates climbed well above 6%, to refinance to a lower rate. However, mortgage rates will need to fall below 6% to make refinancing an attractive option for a broader range of homeowners. Approximately 81% of U.S. homes have a mortgage with a rate of 6% or lower, according to Realtor.com.

Economists generally forecast the average rate on a 30-year mortgage to remain near the mid-6% range this year.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also inched up this week. The average rate rose to 5.55% from 5.49% the previous week. A year ago, it was 5.25%, according to Freddie Mac.