U.S. mortgage rates increased for the second consecutive week, reaching their highest levels since early September. According to a recent announcement from Freddie Mac, the average rate for a 30-year fixed mortgage rose to 6.32%, up from 6.12% the previous week. This marks the largest single-week increase since April. The rise in borrowing costs is in line with the uptick in the 10-year Treasury yield.
The yield on the 10-year Treasury bond surpassed 4% recently, following strong employment data that led traders to adjust their expectations regarding significant rate cuts by the Federal Reserve. A key inflation measure showed higher-than-expected gains last month, reinforcing investor sentiment that the Fed is unlikely to make large rate cuts in November.
Freddie Mac's Chief Economist, Sam Khater, commented that the rate increases are driven by changing expectations rather than any abrupt changes in the economy, which has been strong throughout the year. Despite the challenge posed by higher rates, the continued economic strength is expected to support the recovery of the housing market.
