U.S. 30-Year Mortgage Rates Increase

(Reuters) – The average rate on the popular U.S. 30-year mortgage increased to 6.32% this week, marking its largest weekly rise since April. This change is attributed to stronger-than-expected economic data, which led investors to reduce their expectations for further Federal Reserve interest-rate cuts.

According to Freddie Mac, the 30-year fixed-rate mortgage was 20 basis points higher than the previous week when it averaged 6.12%. In comparison, the rate was 7.57% during the same period last year.

The 30-year rate typically follows the yield on the 10-year Treasury note, which rose sharply last week following surprising job growth in September and a decrease in the unemployment rate. This prompted traders to anticipate fewer Fed rate cuts in the coming months than previously believed.

This increase in mortgage rates contrasts with a steady decline seen since May, as investors had expected the Fed to initiate a rate-cutting cycle, which officially started last month.

Currently, financial market expectations indicate that the Fed will lower its policy rate from the current 4.75%-5.00% range to 3.50%-3.75% by mid-next year.