WASHINGTON (AP) — Long-term U.S. mortgage rates jumped this week to their highest level in nearly four years, a sign that the prospect of higher inflation is steadily increasing the cost of borrowing to buy a home.
Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages rose to 4.38 percent this week, up from 4.32 percent last week and the highest since April 2014.
The rate on 15-year, fixed-rate loans rose to 3.84 percent from 3.77 percent last week.
Recent wage gains and rising prices are stoking concerns about inflation picking up, which has caused investors to seek higher interest rates. Mortgage rates are closely aligned with the yield on 10-year U.S. Treasury notes, which has climbed above 2.90 percent from 2.78 percent just two weeks ago.
The low mortgage rates had eased some of the price pressures facing would-be homebuyers. The shrinking inventory of sales listings has caused prices to increase at roughly double the gains in average hourly earnings, making it harder to save for a down payment and purchase a home.
But homebuyers had the benefit of average 30-year mortgages that were 3.78 percent in September. If mortgage rates keep rising at a quick pace, it could limit what people can afford to pay and cause demand for housing to fall.