Average US long-term mortgage rate rises to 6.26%, the third straight increase

Mortgage Rates Overview - The average rate on a 30-year U.S. mortgage increased to 6.26% from 6.24% last week, compared to 6.84% a year ago, marking the third consecutive week of rising rates [1][2] - The average rate on 15-year fixed-rate mortgages also rose to 5.54% from 5.49% last week, down from 6.02% a year ago [2] Impact on Housing Market - Rising mortgage rates have reduced homebuyers' purchasing power, with the 30-year mortgage rate remaining above 6% since September 2022, which has contributed to stagnant sales of previously occupied U.S. homes at around a 4-million annual pace [2][3] - Despite sluggish sales, there was a boost in activity this fall as mortgage rates eased, with sales accelerating to their fastest pace since February [3] Influencing Factors - Mortgage rates are influenced by the Federal Reserve's interest rate policies and bond market expectations regarding the economy and inflation, typically following the trajectory of the 10-year Treasury yield [4] - The 10-year Treasury yield was at 4.10%, slightly down from the previous week but up from around 3.95% on October 22 [4] Federal Reserve Actions - Mortgage rates began to decline this summer following the Federal Reserve's decision to cut its main interest rate in September amid signs of a slowing labor market [5] - The Fed lowered its key interest rate again last month, although further cuts are not guaranteed according to Fed Chair Jerome Powell [5] Market Expectations - Wall Street traders have reduced expectations for a Fed rate cut at the next meeting in December to approximately 44%, down from nearly 70% a couple of weeks ago [6] - The central bank does not directly set mortgage rates, and cuts in short-term rates do not necessarily lead to declines in home loan rates [6]