Average rate on a 30-year U.S. mortgage hits 6.91%, according to Freddie Mac, the highest since July

WASHINGTON (AP).

The benchmark 30-year fixed rate rose to 6.91% from 6.85% last week, from 6.62% a year ago, according to mortgage giant Freddie Mac.

Rising home loan values ​​reflect rising bond yields, which lenders use as a guide to pricing mortgage loans. Growth occurs with house prices are constantly rising.

The average rate for a 15-year fixed-rate mortgage, which is common among homeowners looking to refinance, rose to 6.13% from 6% and also the highest since July. It was 5.89% a year ago.

“Mortgage rates are at their highest point in nearly six months, at just 7%,” said Sam Cutter, chief economist at Freddie Mac However, buyers appear to be more inclined to exit as pending home sales increase.”

Interest rates are rising after the Federal Reserve signaled last month that it expects to raise its benchmark interest rate just twice this year, compared with four cuts forecast in September.

The reason for the Fed to slam on the brakes is that inflation is persistently above the central bank’s 2% target, although it has fallen from the highs it hit in mid-2022.Economists also worry that President-elect Donald Trump’s economic policies, especially import tariffs his plan to raise significantly could boost inflation.