30-year mortgage rates reach 6.76 percent

The average 30-year fixed-rate mortgage reached 6.76 percent. This is the highest level in 15 months. The rate rose five basis points from the previous week. It continues a three-week upward trend. A year ago, the rate was 6.35 percent. Freddie Mac reported these figures on Thursday.

The 15-year fixed-rate mortgage also increased. It rose to 6.09 percent from 6.04 percent. A year prior, the 15-year rate stood at 5.50 percent. These figures reflect broader pressure on housing costs. Buyers face higher monthly payments for the same loan amount.

Treasury yields drive mortgage pricing

The 10-year Treasury yield hit 4.92 percent. This is the highest level since November 2023. Mortgage rates typically track this benchmark closely. The 30-year rate usually runs two percentage points above the 10-year yield. This direct link explains the recent spike in borrowing costs.

Several factors are pushing Treasury yields higher. Oil prices remain above 100 dollars per barrel. US-Iran hostilities continue to affect energy markets. Inflation expectations remain persistent. Investors are also concerned about federal debt levels. These pressures have weighed on the housing market since late February.

Fed hike expectations rise

Markets are watching the Federal Reserve closely. The FOMC meets on September 15 and 16. CME FedWatch data shows a 70 percent probability of a rate hike. This shift in expectations follows recent economic data. The August payrolls report showed 162,000 new jobs. This figure exceeded consensus estimates.

Some experts argue a hike could lower mortgage rates. Melissa Cohn of William Raveis Mortgage suggests this outcome. She believes a decisive move would restore confidence in Treasurys. This could pull yields down. The Fed is likely moving into a hiking cycle soon. Three dissents in favor of a hike at the August meeting signal this shift.

Buyers face difficult conditions

Sam Khater of Freddie Mac advises buyers to shop around. Getting multiple quotes can save thousands of dollars. Rate relief may be weeks away. The current environment is difficult for buyers and brokers. The next CPI release will provide more clarity. Investors remain cautious until the Fed acts.