Mortgage rates hit two-month high ahead of spring home-buying season

U.S. mortgage rates rose for the fourth week in a row to a two-month high, in a major blow to housing affordability.

The 30-year fixed-rate mortgage rose and averaged 6.94% as of February 29, according to data released by Freddie Mac FMCC, +0.01% on Thursday.

It’s up 4 basis points from the previous week — one basis point is equal to one hundredth of a percentage point.

A year ago, the 30-year was averaging at 6.65%.

The average rate on the 15-year mortgage was 6.26%, down from 6.29% last week. The 15-year was at 5.89% a year ago.

Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.

Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 7.15% as of Thursday afternoon. The Mortgage Bankers Association’s survey noted that the 30-year was at 7.04% as of February 23.

What Freddie Mac said: “The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying,” Sam Khater, chief economist at Freddie Mac, said in a statement.

“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,” he added.

What are they saying? “Higher than anticipated inflation and jobs data are keeping upward pressure on mortgage rates,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement.

“And an insufficient volume of existing homes for sale in many markets is making it even more difficult for many aspiring buyers to get in the market,” he added.