The average rate on a 30-year mortgage rose for the fifth straight week, returning to its highest level in about two months.

Mortgage buyer Freddie Mac said Thursday the 30-year mortgage rate rose to 6.72 percent this week, up from 6.54 percent last week. The average rate of 6.72 percent is still down from the average rate of 7.76 percent a year ago.

Borrowing costs on 15-year fixed-rate mortgages also increased to 5.99 percent this week, up from 5.71 percent last week. This rate averaged 7.03 percent a year earlier.

How have mortgage rates changed this year?

The last time the average 30-year mortgage rate was this high was on August 1, when it was 6.73%.

Mortgage rates on a 30-year home loan have fluctuated throughout the year, reaching a high of 7.22% in May. At the end of September, the average rate fell to 6.08 percent, the lowest level in two years.

What will mortgage rates look like in the future?

Economists predict that mortgage rates will continue to fluctuate for the rest of the year. However, they generally forecast a rate cut in 2025.

Factors such as the Labor Department’s October jobs report, which will be released Friday, and the Nov. 5 election will continue a volatile environment for home loans.

“With several potential inflection points over the next week, including the jobs report, the 2024 election, and the Federal Reserve’s interest rate decision, we can expect rates mortgages remain volatile,” said Sam Khater, Freddie Mac’s chief economist.

Khater added: “While uncertainty remains, it appears that mortgage rates are peaking, and we do not expect them to reach the highs we saw earlier this year. »

Hope for Home Buyers

There is hope for potential home buyers after the Federal Reserve lowered its benchmark interest rate, which was at a 23-year high, by half a percentage point, to between 4 .75 and 5 percent in September.

The Fed raised its benchmark rate, the federal funds rate, 11 times in 2022 and 2023 to reach curb high inflationwhich hit both the United States and countries around the world after the pandemic. The September interest rate cut was the first in four years.

The federal funds rate is the target interest rate at which commercial banks borrow and lend their additional reserves to each other overnight. Even though the Fed does not control mortgage rates, if the federal funds rate continues to fall, the cost of consumer borrowing, including mortgages, auto loans and credit cards, is expected to decline over time.

Economists expect the Fed to cut its benchmark rate by a quarter point when it meets next week.

This article includes reporting from the Associated Press.