Long-term mortgage rate hits 6.52%, just below its high this year

The average long-term U.S. mortgage rate increased to 6.52% this week, nearing its highest point for the year, according to Freddie Mac's report on Thursday. This rate is up from 6.48% the previous week but remains below the 6.84% recorded a year ago. Elevated mortgage rates can significantly increase monthly payments for borrowers, thereby diminishing their purchasing power. Mortgage rates are influenced by Federal Reserve policy, bond market expectations regarding the economy and inflation, and generally track the yield of the 10-year Treasury note. Since late February, when the conflict between the U.S. and Iran began, disrupting oil flows and increasing inflation, mortgage rates have trended upward. The yield on the U.S. 10-year Treasury note stood at 4.53% on Thursday, up from 4.47% a week prior and 3.97% in late February. In late February, the 30-year mortgage rate had briefly dipped below 6%, a level not seen since late 2022, but has not fallen below it since. The rate reached 6.53% two weeks ago, its highest point since August 28. The persistent upward trend and uncertainty surrounding future rate movements have led many potential homebuyers to delay their purchases, contributing to a decline in sales of previously occupied U.S. homes in the first quarter.