US mortgage rates climb for second straight week, hitting 6.66%

MORTGAGE rates in the United States inched up for the second week in a row.

The average for a 30-year, fixed loan was 6.66 per cent, up from 6.62 per cent last week, Freddie Mac said on Thursday (Jan 11).

Borrowing costs have risen slightly as traders grapple with questions around the Federal Reserve’s future path. US inflation accelerated in December, tempering expectations about possible rate cuts from the central bank. Federal Reserve Bank of New York president John Williams cautioned that policymakers need more evidence before making cuts.

That’s kept the yield on the 10-year Treasury hovering above 4 per cent, and pushed mortgage rates higher.

Mortgage rates remaining in the mid-6 per cent range has “marginally increased homebuyer demand”, Sam Khater, Freddie Mac’s chief economist, said. “Even this slight uptick in demand, combined with inventory that remains tight, continues to cause prices to rise faster than incomes, meaning affordability remains a major headwind for buyers.”

The housing market has shown more signs of life after a decline in mortgage rates at the end of last year eased some pressure for buyers. Redfin’s homebuyer demand index – which measures tour requests and other buying services from its agents – rose 5 per cent in the four weeks ended Jan 7 from a month earlier. Contracts to buy homes had their smallest annual decline in two years, according to Redfin. BLOOMBERG