The average rate for a 30-year fixed mortgage has increased for the fifth straight week, reaching the highest levels since early August.

According to Freddie Mac, the national mortgage institution, the average rate for a 30-year fixed mortgage rose to 6.72% this week, up by 18 basis points from the previous week, though still 1.04 percentage points lower than the 7.76% rate from a year ago. For 15-year fixed mortgages, the average rate climbed to 5.99% from 5.71% last week, still 1.04 percentage points below last year’s rate of 7.03%.

Experts predict that mortgage rates may continue rising in the short term due to factors like the 10-year U.S. Treasury yield. Freddie Mac’s Chief Economist, Sam Khater, stated, “Mortgage rate volatility is expected to persist ahead of the Federal Reserve's upcoming policy decision. While uncertainties remain, rates are unlikely to reach the peak levels observed earlier this year.”

This increase in mortgage rates has led to a significant drop in mortgage applications. Overall mortgage applications fell by 10.8% from the previous week. Specifically, applications for home purchases decreased by 5%, though they are still up 2% compared to the same time last year. Refinancing applications saw a sharper decline, falling by 19% from the previous week but still up 48% year-over-year.

Concerns are growing in the housing industry about the potential negative impact of increased mortgage rate volatility on the housing market. David Auld, CEO of homebuilding company D.R. Horton, told CNBC, “Some buyers are hesitant due to mortgage rate volatility. Although rates have dropped from their peak earlier this year, many potential buyers are choosing to wait, expecting rates to be lower in 2025.”

<Hwandong Cho>