US Mortgage Rates Hit Highest Level in Over a Year Amid Inflation Worries

Mortgage rates in the US have risen for the third consecutive week, pushing the average long-term home loan rate to its highest level in over 14 months. The benchmark 30-year fixed-rate mortgage rose to 6.76% from 6.71% last week, according to Freddie Mac.

This increase can add hundreds of dollars a month in costs for borrowers, limiting their purchasing power and leading prospective homebuyers to delay buying a home. As a result, the US housing market remains largely stagnant this year.

The 10-year Treasury yield has also risen, reaching levels not seen since late 2023 due to concerns about inflation and the growing US debt. The yield was at 4.92% as of midday Thursday on the bond market, up from 4.77% just a week ago.

Wall Street traders are betting on a roughly 70% chance that the Federal Reserve will raise its main interest rate at its next meeting on September 15-16 to help combat high inflation. Fed Chair Kevin Warsh has hinted that the central bank might have 'more work to do' to bring down inflation.