The average rate on a 30-year mortgage in the U.S. rose for the third week in a row, reaching its highest level in eight weeks.
The rate rose to 6.44% from 6.32% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.63%.
The last time the average rate was higher was on August 22, when it was 6.46%.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve's interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield on the 10-year Treasury was 4.09% Thursday, up from 3.62% in mid-September, just days before the Fed slashed its benchmark lending rate by a half a point.
The average rate on a 30-year mortgage has been rising since reaching its lowest level in two years — 6.08% — three weeks ago. The rate remains well below the 7.22% it hit in May, its 2024 peak.
Mortgage rates have been climbing in recent weeks following a spate of encouraging reports on the U.S. economy, including a hotter-than-expected September jobs report and a snapshot of consumer prices.
"While we expect the long-run trend in mortgage rates to be downward, recent weeks have brought volatility," said Ralph Mclaughlin, senior economist at Realtor.com.
Generally, higher rates reflect the strength in the economy, which helps support the housing market. But as mortgage rates rise they can also add hundreds of dollars a month in costs for borrowers, reducing home shoppers' purchasing power as they navigate a housing market with prices near all-time highs.