LOS ANGELES (AP) — The average long-term U.S. mortgage rate rose to its highest level in five weeks, a setback for prospective homebuyers during what's traditionally the busiest time of the year for home sales.
The average rate on a 30-year mortgage rose to 6.88% from 6.82% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.27%.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.
Rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubt among bond investors over how soon the Federal Reserve will move to lower its benchmark interest rate. The central bank has signaled that it expects to cut its short-term rate three times this year once it sees more evidence of cooling inflation.
On Wednesday, Treasury yields jumped in the bond market following a report showing that inflation was hotter last month than economists expected. The March consumer prices report was the third straight showing inflation readings well above the Fed’s 2% target. A report on Thursday showed inflation at the wholesale level was a touch lower last month than economists expected.
The yield on the 10-year Treasury, which lenders use as a guide to pricing loans, jumped to 4.57% on Thursday afternoon, it’s highest level since November. How the bond market reacts to the Fed’s interest rate policy, the moves in the 10-year Treasury yield, as well as other factors can influence mortgage rates.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, though it also hasn’t gone below the 6.6% it averaged in mid January.
Mortgage rates will likely continue to hover between that 6.6% and 7% range until inflation shows convincing progress towards the Fed’s target, said Hannah Jones, Realtor.com’s senior economic research analyst.
“Eager buyers and sellers are hoping to see more favorable housing conditions as the spring selling season kicks off,” said Jones. “However, mortgage rates have offered little relief as economic data, as measured by both inflation and employment, remains strong.”
The U.S. housing market is coming off a deep, 2-year sales slump triggered by a sharp rise in mortgage rates and a dearth of homes on the market. The overall pullback in mortgage rates since their peak last fall helped spur a pickup in sales the first two months of this year.
Sales of previously occupied U.S. homes rose in February from the previous month to the strongest pace in a year. That followed a month-to-month home sales increase in January.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 5%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4%.
Many economists still expect that mortgage rates will ease moderately later this year, though most forecasts call for the average rate on a 30-year home loan to remain above 6%.
The cost of refinancing a home loan also got pricier this week. Borrowing costs on 15-year fixed-rate mortgages, often used to refinance longer-term mortgages, rose this week, pushing the average rate to 6.16% from 6.06% last week. A year ago it averaged 5.54%, Freddie Mac said.
FILE - A new home under construction is seen, Aug. 21, 2023, in southeast Denver. On Thursday, April 11, 2024, Freddie Mac reports on this week's average U.S. mortgage rates. (AP Photo/David Zalubowski, File)
Israel's military has ordered tens of thousands of people in the southern Gaza city of Rafah to begin evacuating, signaling that a long-promised ground invasion could be imminent.
The announcement on Monday complicated last-ditch efforts by international mediators to broker a cease-fire. Hamas and Qatar, a key mediator, have warned that an invasion of Rafah could derail the talks.
Israel has described Rafah as the last significant Hamas stronghold after seven months of war, and its leaders have repeatedly said they need to carry out a ground invasion to defeat the Islamic militant group.
Lt. Col. Nadav Shoshani, an army spokesman, said some 100,000 people were being ordered to move to a nearby Israel-declared humanitarian zone called Muwasi. He said Israel was preparing a “limited scope operation” and would not say whether this was the beginning of a broader invasion of the city.
The Israel-Hamas war has driven around 80% of Gaza’s population of 2.3 million from their homes and caused vast destruction in several towns and cities. The death toll in Gaza has soared to more than 34,500 people, according to local health officials.
The war began Oct. 7 when Hamas attacked southern Israel, abducting about 250 people and killing around 1,200, mostly civilians. Israel says militants still hold around 100 hostages and the remains of more than 30 others.
Currently:
— Israeli army tells Palestinians to evacuate parts of Rafah ahead of an expected assault
— Hamas says latest cease-fire talks have ended. Israel vows military operation in ‘very near future’
— Israel orders Al Jazeera to close its local operation and seizes some of its equipment
— Netanyahu uses Holocaust ceremony to brush off international pressure against Gaza offensive
— Anti-war protesters leave USC after police arrive, while Northeastern ceremony proceeds calmly
— Israeli strike kills 4 civilians in southern Lebanon, state media says
Follow AP’s coverage of the war at https://apnews.com/hub/israel-hamas-war
Here's the latest:
JERUSALEM — The Israeli army has ordered tens of thousands of people in the southern Gaza city of Rafah to begin evacuating, signaling that a long-promised ground invasion could be imminent.
The announcement on Monday complicated last-ditch efforts by international mediators, including the director of the CIA, to broker a cease-fire. Hamas and Qatar, a key mediator, have warned that an invasion of Rafah could derail the talks.
Israel has described Rafah as the last significant Hamas stronghold after seven months of war, and its leaders have repeatedly said they need to carry out a ground invasion to defeat the Islamic militant group.
Lt. Col. Nadav Shoshani, an army spokesman, said some 100,000 people were being ordered to move to a nearby Israel-declared humanitarian zone called Muwasi. He said Israel was preparing a “limited scope operation” and would not say whether this was the beginning of a broader invasion of the city. But last October, Israel did not formally announce the launch of a ground invasion that continues to this day.
BEIRUT — An Israeli airstrike on northeastern Lebanon wounded three people and destroyed a building, Lebanon’s state-run National News Agency says.
The strike on the village of Safri early Monday targeted a factory in the eastern Bekaa Valley, the agency said without giving further details.
The Israeli military said its fighter jets struck a Hezbollah military structure in Safri.
Monday’s strike came after a tense day along the Lebanon-Israel border during which an Israeli airstrike on a village near the border killed four Lebanese civilians.
The militant Hezbollah group said it fired dozens of rockets in retaliation toward northern Israel.
The Lebanon-Israel border has seen almost daily exchange of fire since a day after the Israel-Hamas war started on Oct. 7.
Israeli strikes have killed more than 350 people in Lebanon, most of them fighters with Hezbollah and allied groups but also including more than 50 civilians. In Israel, strikes from Lebanon have killed at least 10 civilians and 12 soldiers.
The office of late Al Jazeera network journalist Shireen Abu Akleh is decorated with memorial items, inside the network's office, in the West Bank city of Ramallah Sunday, May 5, 2024. Israel ordered the local offices of Qatar's Al Jazeera satellite news network to close Sunday, escalating a long-running feud between the broadcaster and Prime Minister Benjamin Netanyahu's hard-line government as Doha-mediated cease-fire negotiations with Hamas hang in the balance. (AP Photo/Nasser Nasser)
Palestinians react next to the bodies of their relatives who were killed in an Israeli airstrike in Gaza Stirp, at the Al Aqsa hospital in Deir al Balah, Gaza, Sunday, May 5, 2024. (AP Photo/Abdel Kareem Hana)
Palestinians react next to the bodies of their relatives who were killed in an Israeli airstrike in Gaza Stirp, at the Al Aqsa hospital in Deir al Balah, Gaza, Sunday, May 5, 2024. (AP Photo/Abdel Kareem Hana)
A Palestinian woman mourns her relative, 7-month old baby Hani Qeshta, who was killed in an Israeli bombardment on a residential building with Qeshta's family, at the morgue of Al Najjar hospital in Rafah, southern Gaza Strip, Sunday, May 5, 2024. (AP Photo/Ismael Abu Dayyah)
Israeli soldiers drive a tank at a staging ground near the border with the Gaza Strip, in southern Israel, Sunday, May 5, 2024. (AP Photo/Tsafrir Abayov)
The Qeshta family is seen in body bags at the morgue of Al Najjar hospital in Rafah, southern Gaza Strip, Sunday, May 5, 2024. The family was killed in an Israeli bombardment on a residential building in Rafah. (AP Photo/Ismael Abu Dayyah)
