Mortgage rates in the US increased to the highest level since July.
The average for a 30-year, fixed loan was 6.79%, up from 6.72% last week, Freddie Mac said in a statement.
Higher borrowing costs are discouraging potential homebuyers from jumping into the market. Applications for purchase loans dropped 8% in October, meaning sales “almost certainly” will not climb above a 4 million annualized rate by the end of the year, according to Capital Economics.
“It is clear purchase demand is very sensitive to mortgage rates in the current market environment,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
Buyers willing to crack into the market are finding more properties for sale. In the four weeks through Nov. 3, active listings climbed about 12% from a year earlier, according to Redfin Corp. Homes are lingering for a median of 41 days, up about a week from a year earlier.
The yield on the 10-year Treasury surged Wednesday after Donald Trump won the presidential election. Trump’s promises of tax cut and tariff policies could stoke price pressure and raise the risk that higher rates would be needed to tame inflation.
Investors are closely watching the Federal Reserve, which is widely expected to cut its benchmark interest rate later Thursday.
This article was provided by Bloomberg News.