U.S. mortgage rates rise to the highest in more than seven years

Mortgage rates in the U.S. rose for a fifth straight week, reaching levels not seen in more than seven years.

The average rate for a 30-year fixed mortgage was 4.72 percent, up from 4.65 percent last week and the highest since April 2011, Freddie Mac said in a statement Thursday. The average 15-year rate climbed to 4.16 percent from 4.11 percent, the McLean, Virginia-based mortgage finance company said.

Rising rates are adding to the cost of homeownership after years of soaring prices that have outpaced income gains. On Wednesday, Federal Reserve policy makers, citing strong job growth, raised the benchmark interest for the third time this year and reaffirmed their outlook for further gradual increases well into 2019.

“Interest rates are rising because the economy is getting better,” Greg McBride, chief financial analyst at Bankrate.com, said by phone. “But the rising interest rates can start to take a toll on borrowers after a point. In the mortgage market, we’re starting to reach that point.”

Borrowing costs will continue rising throughout the year, with 30-year fixed rates hitting 5 percent before 2019, according to Danielle Hale, chief economist for Realtor.com. The 30-year average was 3.83 percent a year ago.

“Although this will take some of the pressure off home prices, it will come at the expense of home sales, which are already struggling,” Hale said in a statement.