Home buyers face higher borrowing costs this week as the average rate on a 30-year fixed-rate mortgage hit a 19-month high of 6.95 percent, according to data released by the housing-finance giant Freddie Mac.
It’s the highest that mortgage rates have climbed since President Donald Trump took office.
Mortgage rates tend to follow the 10-year Treasury yield, which climbed this week to 5 percent, the highest in years.
The rise in mortgage rates is relatedto the Federal Reserve’s move to raise interest rates by a quarter point on Wednesday, its first increase in more than three years, in an effort to tame inflation. The Fed hike came too late in the week to factor heavily into Freddie Mac’s weekly average, though markets had widely expected the increase.
“Counterintuitively, a higher fed funds rate today is the medicine the housing market needs to recover tomorrow,” Mischa Fisher, chief economist at Zillow, said in a post on LinkedIn. “Greater market confidence in inflation being under control is more likely to bring mortgage rates lower in 2027 and get the recovery back on track.”
“Unfortunately,” Fisher added, “it’s going to be a challenged end of the year for home sales before we get there.”
The 30-year mortgage rate is up from 6.76 percent a week ago and 6.26 percent a year ago, according to Freddie Mac.
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