Mortgage Rates Hit One-Year High, Further Weighing on Homebuyers

The average long-term U.S. mortgage rate has reached its highest level in a year, affecting prospective homebuyers who are facing elevated borrowing costs.

The benchmark 30-year fixed-rate mortgage rate rose to 6.66% from 6.58%, according to Freddie Mac's recent report.

This increase can add hundreds of dollars to monthly payments for borrowers, limiting their purchasing power and potentially leading to delayed homebuying decisions.

The Federal Reserve's interest rate policy decisions, along with bond market investors' expectations for the economy and inflation, contribute to mortgage rates. They tend to follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.