US mortgage rates inch up from a three-year low, reaching 6.09%
High borrowing costs have held back buyers and sellers for years
[BOSTON] US mortgage rates climbed from a three-year low as fears about a potential trade war over Greenland drove up yields for the government bonds that guide home loans.
The average for 30-year, fixed loans was 6.09 per cent, up from 6.06 per cent last week, which was the lowest point since September 2022, data from Freddie Mac showed on Thursday (Jan 22).
US President Donald Trump’s announcement of a plan to buy US$200 billion in mortgage bonds, part of his broader affordability campaign, helped drive down borrowing costs last week. But the bond market reversed course after he threatened to levy tariffs on European countries that opposed his bid to take over Greenland.
While Trump has since backed off on those tariffs, his initial remarks were enough to reignite trade-war fears and undo some recent progress on mortgage costs, according to Jake Krimmel, senior economist with Realtor.com.
“As much as rattling the international order is a big part of his foreign policy and economic policy, that’s exactly what will keep upward pressure on mortgage rates,” Krimmel said.
High borrowing costs have held back buyers and sellers for years, and an upward climb might temper the optimism industry experts had as rates came close to hitting 6 per cent.
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The market could use a jump-start. Last month, contracts to buy resale homes had their biggest decline since the pandemic lockdowns in April 2020, according to the National Association of Realtors. BLOOMBERG
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