US Mortgage Rate Hits 2-Year High, Tops 7% Amid Fed Rate Hikes
The US 30-year mortgage rate has topped 7% for the first time since President Donald Trump's term began, reaching its highest level in over two years. The Mortgage Bankers Association reported that the average 30-year fixed-rate mortgage rose to 7.12% last week, a 15 basis point increase from the previous week.
This surge is attributed to the Federal Reserve's decision to lift short-term interest rates to combat inflation, as well as rising oil prices driving up Treasury yields that underpin residential borrowing costs.
Mortgage rates have risen over a full percentage point since joint US-Israeli strikes against Iran began pushing up the global price of oil in late February, putting pressure on prospective homebuyers and the US housing market.
The Fed's policy rate increase to 3.75%-4.00% has also contributed to the rise in mortgage rates, with nearly all policymakers projecting at least one more rate increase by the end of this year.