U.S. mortgage rates have risen for four consecutive weeks, soaring to their highest level since President Donald Trump began his second term. According to Freddie Mac, a U.S. government-sponsored mortgage lender, on the 17th, the average rate for a 30-year fixed-rate mortgage stood at 6.95% this week, up 0.19 percentage points from the previous week. This marks the fourth consecutive week of increases and was the largest weekly rise in 16 months.
Interest rates, now closely approaching the 7% mark, are also the highest level since January of last year, immediately following the start of President Trump’s second term. While mortgage rates showed a downward trend early this year, briefly falling below 6% in February for the first time in three years, they have continued a steep upward trajectory due to a confluence of factors: rising international oil prices following the outbreak of war in Iran, increasing inflationary pressure, and concerns regarding U.S. government fiscal spending. The yield on 10-year U.S. Treasury bonds, considered a key benchmark for U.S. mortgage rates, even breached the psychological resistance level of 5% this week.
Consequently, if a buyer purchasing a typical home takes out a 30-year mortgage at a rate close to 6% early this year versus the current rate, the difference in total principal and interest payments could amount to tens of thousands of dollars. The Federal Reserve’s decision yesterday to raise the benchmark interest rate by 0.25 percentage points to defend against inflation could also act as a burden on borrowing conditions for homebuyers in the short term. However, some analysts suggest that if the Fed’s interest rate hikes lead to actual inflation control, they could help lower mortgage rates in the long run. Misha Fisher, chief economist at U.S. real estate information firm Zillow, stated, “Today’s high benchmark interest rate is the medicine needed for tomorrow’s housing market recovery,” adding, “As market confidence grows that inflation is under control, mortgage rates will fall, and the likelihood of the housing market recovery getting back on track increases.”