Hamilton Journal News

Average long-term U.S. mortgage rate rises to 6.71%

- By Alex Veiga

LOS ANGELES — The average long-term U.S. mortgage rate rose this week, snapping a three-week pullback after reaching a high for the year in early June.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.71% from 6.67% last week. A year ago, the rate averaged 5.70%.

The increase brings the average rate back to where it was three weeks ago. On June 1, it averaged 6.79%, its highest level so far this year.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market that remains unaffordab­le to many Americans after years of soaring home prices and limited housing inventory.

The median monthly payment listed on applicatio­ns for home purchase loans in May rose to $2,165, up 14.1% from a year ago and a 2.5% increase from April, the Mortgage Bankers Associatio­n said Thursday.

The average rate on a 30-year home loan is still more than double what it was two years ago, when the ultra-low rates spurred a wave of home sales and refinancin­g. The far higher rates now are contributi­ng to the low level of available homes by discouragi­ng homeowners who locked in those lower borrowing costs two years ago from selling.

The dearth of properties on the market is also a key reason home sales have been slow this year. Last month, sales of previously occupied U.S. homes were down 20.4% from as year earlier, marking 10 consecutiv­e months of annual declines of 20% or more, according to the National Associatio­n of Realtors.

Low mortgage rates helped fuel the housing market for much of the past decade, easing the way for borrowers to finance ever-higher home prices.

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