The average interest rate on the popular 30-year US mortgage rose to 6.32% this week. That’s the biggest one-week increase since April, as a series of better-than-expected economic data prompted investors to trim their bets on further interest rate cuts from the Federal Reserve.
The 30-year fixed-rate mortgage was 20 basis points higher than the previous week, when it averaged 6.12%, mortgage finance giant Freddie Mac said on Thursday. In the same period a year ago, the average was 7.57%.
The 30-year interest rate is closely based on the yield of the 10-year Treasury note. This jumped last week after September job growth exceeded forecasts and the unemployment rate fell. This led traders to price in smaller and fewer Fed rate cuts in the coming months than previously expected.
The reversal comes after mortgage rates have fallen steadily since May as investors prepared for the Fed to begin a rate-cutting cycle it began last month.
Financial market bets currently reflect expectations that the Fed will cut its key interest rate, currently between 4.75% and 5.00%, to a range of 3.50% to 3.75% by the middle of next year.
