Mortgage rates rise to 6.9% in third-straight increase

The 30-year fixed-rate mortgage averaged 6.90% in the week ending February 22, up from 6.77% the previous week, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.50%.

Mortgage rates have been making smaller moves over the past two months, after coming down from last year’s high, 7.79%, reached in October. The average rate hovered near 6.6% for more than a month, which brought improved affordability for homebuyers who’ve been struggling in one of the least affordable markets in decades.

But in recent weeks, as the market processes indications from the Federal Reserve that it will not cut its benchmark rate until later this year, mortgage rates have trended higher.

“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” said Sam Khater, Freddie Mac’s chief economist in a statement.

While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions.

Historically, Khater said, the mix of a strong economy and higher rates didn’t meaningfully impact the housing market.

But this cycle is different, he said, adding, “housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”

This is a developing story and will be updated.

The-CNN-Wire™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.