Mortgage rates spike for third straight week while buyers grow cautious
Mortgage rates rose for the third consecutive week, prompting fewer homebuyers and refinancers to move forward with transactions.
The average 30-year fixed-rate mortgage rose to 6.44% in the week through Wednesday, hitting the highest level since August, according to Freddie Mac data. A week earlier, it was 6.32%.
Average 15-year mortgages jumped to 5.63%, from 5.41% a week earlier.
“In general, higher rates reflect the strength in the economy that is supportive of the housing market," Sam Khater, Freddie Mac's chief economist, said in a statement.
Mortgage rates have been on the rise as markets adjust expectations about the size and pace of future Federal Reserve rate cuts. The recent upticks have curtailed refinancing activity and kept the pace of homebuying anemic. Applications to refinance a mortgage dropped 26% through Friday compared to a week earlier, according to the Mortgage Bankers Association.
Even though average rates are still more than a percentage point lower than they were a year ago, many potential homebuyers are remaining cautious. Applications to purchase a home fell 7% week over week, though they remain around 7% higher compared to the same period a year ago.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.