US mortgage rate up a little on last year

The average long-term US 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 per cent from

6.63 per cent last week, mortgage buyer Freddie Mac said. A year ago, the rate averaged 6.12 per cent.

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 per cent this week as bond traders reacted to the government's January jobs report . The surprisingly strong report stoked worries it could persuade the Federal Reserve to wait longer before cutting interest rates.

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

Borrowing costs on 15-year fixedrate mortgages, popular with homeowners refinancing their home loans, fell this week, pulling the average rate down to 5.90 per cent from 5.94 per cent last week. A year ago it averaged

5.25 per cent, Freddie Mac said. The overall decline in rates since their peak last (northern) autumn has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale as spring nears.

Still, the average rate on a 30-year mortgage remains sharply higher than just two years ago

Many economists are projecting that mortgage rates will continue heading lower this year.

“Homebuyers should expect mortgage rates to move lower as we head through 2024, but that does not necessarily mean it will be easier to buy a home,” said Lisa Sturtevant, chief economist at Bright MLS. "Waiting to buy later this year might mean a buyer can get a lower rate, but prices are still rising and inventory will still be tight, which means the market will still be competitive.”

Elevated mortgage rates and a dearth of available homes have kept the US housing market mired in a slump the past two years. Sales of previously occupied US homes sank to a nearly 30-year low last year, tumbling

18.7 per cent from 2022.