NEW YORK (Reuters) - U.S. 30-year mortgage rates rose to an average of 6.81% this week, the highest level of 2023, according to Freddie Mac (OTC:FMCC)'s mortgage market survey.
Mortgage rates have risen sharply in tandem with the Federal Reserve's aggressive monetary policy stance adopted since last year aimed at curbing inflation. As a result, the rates climbed to 7.08% in November 2022 - its highest in two decades.
Interest rates on 30-year mortgages - the most popular home loan in the U.S - averaged 6.71% last week. The rates were at 5.3% a year ago, Freddie Mac data showed.
The yield on the 10-year Treasury note, which acts as a benchmark for mortgage rates, jumped above 4% on Thursday after labor market data stoked interest rate hike concerns.
"This upward trend is being driven by a resilient economy, persistent inflation and a more hawkish tone from the Federal Reserve. These high rates combined with low inventory continue to price many potential homebuyers out of the market," Sam Khater, Freddie Mac's chief economist, said in a statement.
Also on Thursday, the Mortgage Bankers Association (MBA) said its market composite index, which measures the volume of U.S. mortgage applications, fell 4.4% from the prior week amid the uptick in mortgage rates.