Newly constructed single family homes are shown for sale in Encinitas, California
Higher mortgage rates are delaying home purchases. Reuters

U.S. mortgage rates rose for the fifth consecutive week as markets digest concerns about inflation, interest rates and the conflict between Israel and Hamas.

The average 30-year fixed rate was at 7.57% in the week ended Oct. 12 from 7.49% last week, Freddie Mac said in a statement Thursday. It's the highest level since December 2000. A year ago, the rate was at 6.92%.

"Mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase," Freddie Mac's Chief Economist Sam Khater said in the statement. "The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low."

Consumer prices increased 0.4% in September from 0.6% in August, the Bureau of Labor Statistics said earlier Thursday. The gain surpassed economists' expectations of a 0.3% monthly inflation. The advance from a year earlier was of 3.7%, also above estimates of 3.6% in a Reuters survey of economists.

A persistent inflation reduces the chances of and end for the Federal Reserve's tightening cycle. The U.S. central bank maintained the rate in the range of 5.25% to 5.50% on Sept. 20, the highest level in 22 years, and some of its officials have publicly spoken in favor of an additional increase before the end of the year.

Mortgage rates are directly affected by Fed policy and moves in the Treasury market. The yield of 10-year Treasuries rose to about 4.65% Thursday after two days of decline. On Friday, the yield reached 4.8%, the highest level since 2007.

Markets are also reacting to the crisis in the Middle East. Israel vows to keep bombing Hamas militants in the Gaza Strip and refuses to pause its campaign for aid of evacuations until all hostages are freed.

The consistent rise of mortgage rates is discouraging home purchases. In August, pending home sales dropped 7.1%, the National Association of Realtors said in a statement on Sept. 28.

The Freddie Mac survey on mortgage rates is based on home purchase loans for borrowers who put 20% as a down payment and have excellent credit.