The average interest rate on a 30-year mortgage rose for the sixth week in a row.

The interest rate rose to 6.79 percent from 6.72 percent last week, mortgage buyer Freddie Mac said Thursday.

The average interest rate on a 30-year home loan this week is the highest since July 11, when it was 6.89 percent.

Borrowing costs for 15-year fixed-rate mortgages also rose to 6 percent this week, compared to 5.99 percent last week.

Mortgage rates for a 30-year home loan fluctuated throughout the year, peaking at 7.22 percent in May. At the end of September, the average interest rate fell to 6.08 percent, the lowest level in two years, after the Federal Reserve cut rates.

Potential home buyers discouraged

The recent rise in borrowing costs has deterred some would-be homebuyers.

Mortgage applications last week fell a seasonally adjusted 10.8 percent from the previous week, according to the Mortgage Bankers Association, the housing finance industry’s leading trade association.

This was the sixth straight week that mortgage applications declined.

Meanwhile, loan applications to refinance a mortgage fell 19 percent. However, they were still 48 percent higher than in the same week last year.

There remains hope for potential homebuyers as real estate experts expect mortgage rates to stabilize by the end of 2024.

“While we continue to expect mortgage rates to stabilize through year-end, they will likely be at higher levels than markets originally expected before election week,” said Ralph McLaughlin, senior economist at real estate website Realtor. com.

US elections affect Treasury yields

One of the various factors that influence mortgage rates is the 10-year U.S. Treasury yield, which lenders use as a guide when pricing home loans. The higher the yields on long-term U.S. Treasury bonds, the greater confidence investors have in the future of the economy. On the other hand, high long-term returns can also signal expectations of rising inflation.

Bond yields have already risen on encouraging economic reports, including inflation. But this week, yields rose on expectations that President-elect Donald Trump’s economic plan, based on higher tariffs, lower tax rates and light regulation, could lead to greater economic growth but also higher inflation and higher national debt.

As of Thursday afternoon, the yield on 10-year government bonds was 4.36 percent. As recently as mid-September, the return was 3.62 percent.

“Interest rates and borrower demand are likely to remain volatile in the coming weeks as financial markets digest both the election results and the Fed’s upcoming monetary policy decisions,” said MBA CEO Bob Broeksmit.

The Fed is cutting interest rates again

Mortgage rates are also influenced by the federal funds rate, the Federal Reserve’s key interest rate.

In September, the Fed cut its key interest rate, which was at its highest level in 23 years, by half a percentage point to 4.75 to 5 percent.

The federal funds rate was raised 11 times by the Fed in 2022 and 2023 to curb high inflation that hit both the United States and countries around the world in the wake of the COVID-19 pandemic. September’s rate cut was the first in four years.

On Thursday, the Fed cut interest rates again by a quarter point to 4.5 to 4.75 percent.

The federal funds rate is the target interest rate at which commercial banks borrow overnight and lend their additional reserves to one another. If the federal funds rate continues to fall, the cost of consumer credit — including mortgages, auto loans and credit cards — should decline over time.

This article contains reporting from The Associated Press.