In recent weeks, the cost of borrowing money to purchase a home in the US has been steadily increasing, marking a trend that has persisted for the past six weeks. This comes at a time when the Federal Reserve is expected to announce another interest rate cut, further impacting the housing market.
According to data released by Freddie Mac on Thursday, the average rate on a standard 30-year fixed mortgage stood at 6.79% for the week ending November 7. This uptick in mortgage rates may come as a disappointment to potential homebuyers who were anticipating a decrease in borrowing costs following a potential rate cut by the Federal Reserve.
Earlier in the year, mortgage rates had been on a downward trajectory, reaching a two-year low of 6.08% in late September after the Federal Reserve made its first interest rate cut in four years. However, the recent surge in mortgage rates can be attributed to the movement of the 10-year US Treasury yield, which has been on the rise due to positive economic indicators.
The 10-year Treasury yield experienced a significant increase following the outcome of the US presidential election, where Donald Trump emerged victorious over Vice President Kamala Harris. This event further contributed to the upward trend in borrowing costs for homebuyers.
As mortgage rates continue to be influenced by various economic factors, prospective homebuyers are advised to stay informed and monitor market trends closely to make informed decisions regarding their home purchase plans.
