Average long-term US mortgage rate edges higher

A sign announcing a home for sale is posted outside a home, Thursday, Feb. 1, 2024, in Aceworth, Ga., near Atlanta. On Thursday, Freddie Mac reports on this week's average U.S. mortgage rates. (AP Photo/Mike Stewart)
A sign announcing a home for sale is posted outside a home, Thursday, Feb. 1, 2024, in Aceworth, Ga., near Atlanta. On Thursday, Freddie Mac reports on this week's average U.S. mortgage rates. (AP Photo/Mike Stewart)

LOS ANGELES (AP) -- The average long-term U.S. mortgage rate edged higher this week, reflecting a recent uptick in the 10-year Treasury yield.

The average rate on a 30-year mortgage rose to 6.64 percent from 6.63 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.12 percent.

"Mortgage rates remain stagnant, hovering in the mid-6 percent range over the past several weeks," said Sam Khater, Freddie Mac's chief economist.

The move echoes an increase this week in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield moved above 4 percent this week as bond traders reacted to the government's January's jobs report. The surprisingly strong report stoked worries that it could persuade the Federal Reserve to wait longer before it begins cutting interest rates.

Hopes for such cuts amid signs that inflation has declined from its peak two summers ago have been a major reason the 10-year Treasury yield has mostly pulled back since October, when it climbed to its highest level since 2007.

In an interview broadcast Sunday night, Fed Chair Jerome Powell said the central bank remains on track to cut its benchmark interest rate three times this year, a move that economists expect could begin as early as May.

Investors' expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

The cost of refinancing a home got a little bit less expensive this week. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, fell this week, pulling the average rate down to 5.90 percent from 5.94 percent last week. A year ago it averaged 5.25 percent, Freddie Mac said.

The cost of financing a home has been mostly easing since late October, when the average rate on a 30-year mortgage hit 7.79 percent, the highest level since late 2000. So far this year, the weekly average has ranged between 6.60 percent and 6.69 percent.