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Mortgage rates rose slightly this week, mirroring a jump in the Treasury yields that serve as a benchmark.
The average 30-year fixed-rate mortgage increased to 6.12% as of Thursday, up from a two-year low of 6.08% a week earlier, according to Freddie Mac data. Fifteen-year mortgages averaged 5.25%, up from 5.16% in the same period a week ago.
The increase comes as 10-year Treasury yields, which mortgage rates closely track, have moved higher as investors assess the health of the economy and rising tensions in the Middle East.
“The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Read more: Mortgage and refinance rates today, October 3, 2024: Don’t expect major shifts
Prospective homebuyers are slowly testing the market even as rates linger above 6%. Applications to purchase a home rose 1% week over week through Sept. 27, according to the Mortgage Bankers Association. And they’re up 9% compared to a year ago.
“If we stay in a higher for longer mortgage rate environment, we’ll get people re-anchoring their mortgage rate expectations to 6% instead of 4%,” said Odeta Kushi, deputy chief economist of First American Financial Corporation. She added that major lifestyle changes — “life happens” events like new babies, divorces, or deaths — will still spur people to buy and sell homes.
Refinancing activity fell slightly from a week earlier but is nearly three times as high as it was a year earlier. Mortgage rates have fallen more than 1 percentage point from highs reached in May, spurring many homeowners who bought in the last year to lower their payments by refinancing.
Read more: What is the best time of year to buy a house?
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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