Interest rates on mortgages witnessed an upward trend for the second consecutive week, following a two-year record low.
The typical interest rate on a common, 30-year fixed mortgage settled at 6.32% during the week concluding October 10, according to mortgage lender Freddie Mac. They announced this on Thursday, stating it was the most significant weekly surge in mortgage interest rates since April, and the second consecutive week seeing an increase following a two-year low last month.
Mortgage rates had been on a downward trajectory since the spring. The Federal Reserve's interest rate decrease last month fuelled expectations that mortgage rates might keep declining. However, a job report exceeding expectations last week led to a spike in bond yields. Mortgage rates tend to mirror the 10-year Treasury benchmark yield.
As per Sam Khater, Freddie Mac's chief economist, the escalation in rates majorly stems from altered expectations rather than the economy's performance, which has generally been robust throughout the year. Although higher rates impact affordability, it denotes the robust economy that should maintain and bolster the housing market's recovery.
This story is still in progress and will be updated accordingly.
Businesses needing mortgages might find borrowing costs higher due to the escalating mortgage rates. The robust economy, despite higher rates, could stimulate business growth in various sectors.
