Mortgage rates held steady this week, keeping the average long-term U.S. home loan rate at its highest level in nearly three years.
The benchmark 30-year fixed-rate mortgage was unchanged from last week at 7.40%, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.27%.
The latest reading ends a seven-week climb for the average rate, which is at the highest level since Nov. 16, 2023, when it was at 7.44%.
Meanwhile, borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, eased this week. That average rate dropped to 6.71% from 6.73% last week. A year ago, it was at 5.52%.
Rates on home loans are influenced by inflation, Federal Reserve policy and bond-market investors’ expectations for the economy, among other factors. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Mortgage rates have been climbing since late February, when the U.S. war with Iran began, pushing up the price of oil and driving inflation higher. The run-up in rates also reflects heightened bond market volatility, which has pushed up yields on U.S. Treasurys.
U.S. home sales remain stalled this year in large part because of rising mortgage rates, which can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing power and prompting many to put off buying a home.