© Reuters. Residential single family homes construction by KB Home are shown under construction in the community of Valley Center, California, U.S. June 3, 2021. REUTERS/Mike Blake/File Photo
By Amina Niasse
NEW YORK (Reuters) – U.S. mortgage rates rose for a fourth-straight week, Freddie Mac reported on Thursday, reaching a two-month high and again becoming a factor impeding traffic among rate-sensitive prospective home buyers.
The average rate on a 30-year fixed-rate mortgage ticked up to 6.94% for the week ended Feb. 29 from 6.90% the week prior, the report said.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying. While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines,” said Sam Khater, Freddie Mac’s chief economist.
The rate remains below two-decade highs near 8% reached in October. The Federal Reserve has held its benchmark policy rate unchanged since July, and rates tracked by Freddie Mac have held below 7% since December.
High mortgage rates eroded buyer traffic last year as tight inventory and home price gains limited affordability. Home sales remain under pressure, with pending home sales retreating by 4.9% in January, according to National Association of Realtors data.