The average interest rate on a 30-year mortgage in the U.S. is rising for the sixth week in a row

The average interest rate on a 30-year mortgage in the U.S. rose for the sixth straight week, returning to its highest level since early July.

The interest rate rose to 6.79% from 6.72% last week, mortgage buyer Freddie Mac said Thursday. That's still down from a year ago, when the rate averaged 7.5%.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners looking to refinance their home loans at a lower interest rate, also rose slightly this week. The average rate rose to 6% from 5.99% last week. A year ago, it averaged 6.81%, Freddie Mac said.

As mortgage rates rise, borrowers' costs can rise by hundreds of dollars per month, reducing homebuyers' purchasing power at a time when home prices remain near all-time highs, even as the housing market has already improved since 2022 is in a sales decline.

Mortgage rates are influenced by several factors, including the 10-year U.S. Treasury yield, which lenders use as a guide when pricing home loans. Bond yields have risen following encouraging reports on inflation and the economy.

This week, bond yields rose on expectations that President-elect Donald Trump's plans for higher tariffs, lower tax rates and looser regulation could lead to higher economic growth, higher inflation and higher U.S. national debt.

The yield on the 10-year Treasury note was 4.36% as of midday Thursday. As recently as mid-September it was 3.62%.

The average interest rate on a 30-year home loan hasn't been this high since July 11, when it stood at 6.89%. At the end of September, the average interest rate fell to just 6.08% – the lowest level in two years – after the Federal Reserve decided to cut its key interest rate for the first time in more than four years.

Although the central bank does not set mortgage rates, its policy shift has cleared the way for an across-the-board reduction in mortgage rates.

“While we still expect mortgage rates to stabilize through year-end, they will likely be at higher levels than markets originally expected before election week,” said Ralph McLaughlin, senior economist at Realtor.com.

The recent rise in mortgage rates has deterred some would-be homebuyers. According to the Mortgage Bankers Association, mortgage applications fell last week for the sixth straight week, falling a seasonally adjusted 10.8% from the previous week.

The number of loan applications to refinance a mortgage fell 19%, although it was still 48% higher than the same week last year when interest rates were higher.

“Interest rates and credit demand are likely to remain volatile in the coming weeks as financial markets digest both the election results and the Fed's upcoming monetary policy decisions,” said MBA CEO Bob Broeksmit.