30-Year Mortgage Rates Now Highest Since July: Freddie Mac

The 30-year-mortage rate continues to climb as it hit its highest level since July on Thursday.

The benchmark 30-year fixed-rate mortgage averaged 6.93%, up from last week when it averaged 6.91%, Freddie Mac reported.

A year ago the rate averaged 6.66%.

"In the first full week of the new year, the 30-year fixed-rate mortgage remained elevated at just under 7 percent," Sam Khater, Freddie Mac's chief economist, said.

"The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability. The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners," Khater said.

The rate has been trending up for the past four weeks.

Mortgage rates tend to follow the yield of 10-year Treasury bonds, which have climbed from 3.62% in September to 4.66% this week as inflation persists and fear that President-elect Donald Trump's tariffs plan and tax cuts would lead to more inflation, the New York Times reported.

"The economy has held up stronger, and inflation has come down less than people had hoped," Stijn Van Nieuwerburgh, a professor of real estate and finance at Columbia University, told the newspaper.

The rates are rising even as the Federal Reserve sliced its key interest rate for the third consecutive time in December but noted that it would move cautiously in the new year before considering further cuts, depending on inflation, and the strength of the economy.