By (Reuters) – The average rate on the popular U.S. 30-year mortgage rate increased to 6.32% this week, its largest one week increase since April, as a string of stronger-than-expected economic data caused investors to scale back bets on further Federal Reserve interest-rate cuts.
The 30-year fixed-rate mortgage was 20 basis points higher than a week earlier when it averaged 6.12%, mortgage finance giant Freddie Mac said on Thursday. It averaged 7.57% during the same period a year ago.
The 30-year rate closely tracks the yield on the 10-year Treasury note. That jumped last week after job growth in September blew past predictions and the unemployment rate fell, prompting traders to price in smaller, and fewer, Fed rate cuts over coming months than previously anticipated.
The reversal comes after mortgage rates declined steadily since May as investors geared up for the Fed to begin a rate-cutting cycle, which it began last month.
Financial market bets currently reflect an expectation that the Fed will reduce its policy rate, now in the 4.75%-5.00% range, to a range of 3.50%-3.75% by the middle of next year.
