US mortgage rates have surged to their highest level in two months

Buying News
.The increase follows a jump in yields for the benchmark 10-year Treasury. Adobe Stock

(Bloomberg) — Mortgage rates in the United States climbed to the highest level in two months.

The average for a 30-year, fixed loan reached 2.79 percent, up from 2.65 percent last week and the highest since Nov. 12, Freddie Mac said in a statement Thursday.

The increase follows a jump in yields for the benchmark 10-year Treasury, which climbed above 1 percent last week for the first time since March.

“As Treasury yields have risen, it is putting pressure on mortgage rates to move up,” Sam Khater, chief economist at Freddie Mac, said in the statement.

Mortgage rates have been below 3 percent since July, but higher borrowing costs could threaten a housing rally that’s been a bright spot in the pandemic-battered economy.

With the inventory of homes to buy scarce, the strong demand for larger properties in the suburbs has driven up prices.

With rates ticking up, a lack of affordable properties may slow home sales, but that won’t be an issue until borrowing costs rise above 3 percent, according to Tendayi Kapfidze, chief economist at LendingTree.

The increase reported Thursday has “minimal effect on housing demand,” he said.

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