US Mortgage Rates Hit 6-Year High as Oil Prices and Inflation Bite
US mortgage rates have hit their highest level in a year, reaching 6.66 per cent following a steep one-week rise of 0.26 percentage points. This surge is attributed to rising oil prices and stubborn inflation, which have pushed borrowing costs sharply higher.
The 10-year Treasury yield, the benchmark used by lenders to price home loans, has climbed to 4.66 per cent from 3.97 per cent in late February before the war broke out in Iran. This increase in the 10-year Treasury yield is a key factor contributing to the rise in mortgage rates.
The recent rise in borrowing costs follows a divided decision by the Federal Reserve to leave its benchmark interest rate unchanged, with three regional Fed bank presidents dissenting in favour of higher rates to combat inflation.