Mortgage Rates Jump for Fifth Week, With 30-Year Reaching 6.72%

(Bloomberg) -- Mortgage rates in the US rose for the fifth week in a row.

The average for a 30-year, fixed loan was 6.72%, up from 6.54% last week, Freddie Mac said in a statement Thursday.

Borrowing costs have climbed steadily since late September, when the 30-year average hit a two-year low of 6.08%. Higher mortgage rates are cutting deeper into purchasing power for house hunters already struggling to find affordable listings. Uncertainty over the outcome of the presidential election may also be keeping some would-be buyers on the fence.

Strong economic reports have bolstered the case for a slower pace of interest-rate cuts by the Federal Reserve, which is scheduled to meet next week. A measure of inflation that’s closely watched by the central bank had its biggest monthly gain since April, data for September showed. This month’s employment report is due out Friday.

“With several potential inflection points happening over the next week, including the jobs report, the 2024 election and the Federal Reserve interest-rate decision, we can expect mortgage rates to remain volatile,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “Although uncertainty will remain, it does appear mortgage rates are cresting, and we do not expect them to reach the highs that we saw earlier this year.”

Buyers have shown they’re willing to jump into the market when rates are headed lower. Last month, contracts to purchase previously owned homes had the biggest jump in more than four years, the National Association of Realtors reported.