U.S. mortgage rates are at their highest in more than seven years.
The average rate for a 30-year fixed mortgage climbed to 4.72 percent this week from 4.65 percent last week, Bloomberg reported, citing figures from Freddie Mac. That means homeowners and borrowers are seeing the highest rates since April 2011.
This is the fifth straight week that mortgages have risen in the U.S. The 30-year average stood at 3.83 percent a year ago.
The increase comes after the Federal Reserve raised interest rates by a quarter percentage point on Wednesday. That’s the third increase this year, and more are expected through 2019.
Rising rates are adding to the cost of homeownership, however, after years of soaring prices that have outpaced income gains.
“Interest rates are rising because the economy is getting better,” Greg McBride, chief financial analyst at Bankrate.com told Bloomberg. “But the rising interest rates can start to take a toll on borrowers after a point. In the mortgage market, we’re starting to reach that point.”
Despite the latest hike, current U.S. interest rates are still significantly below the historic benchmark of around 5 percent. But Danielle Hale, chief economist for Realtor.com, told Bloomberg that 30-year fixed rates will likely hit that market before the year’s end. [Bloomberg] — Patrick Mullholand