rewrite this title Weekly Mortgage Rates Rise for 6th Straight Week – NerdWallet

You could illustrate the dictionary definition of “bummer” with a graph of recent mortgage rates.

The 30-year fixed-rate mortgage has now climbed for six weeks in a row. It averaged 6.75% in the week ending Oct. 31, according to rates provided to NerdWallet by Zillow. That’s up 15 basis points from the previous week, and up 86 basis points compared to six weeks ago. A basis point is one-one hundredth of a percentage point.

Because a robust economy pushes upward on mortgage rates, the economy is performing a frustrating balancing act: Encouraging news ends up discouraging people from buying houses or refinancing their home loans.

“Despite easing inflation, surprisingly strong economic data caused Treasury yields and the mortgage rates that shadow them to continue to climb,” said Orphe Divounguy, senior economist for Zillow. “What we saw in the data was strong income growth, which supports consumer spending.”

Increased consumer spending, in turn, can slow progress on reducing the inflation rate. That’s how a strong economy ends up making it more expensive to borrow money to buy a home.

This week’s news on inflation is mixed. The Federal Reserve‘s favored inflation measurement, the PCE price index, showed an overall decline in the annual inflation rate, to 2.1% in September from 2.3% in August.

But the core PCE price index, which strips out the volatile prices for food and energy, remained at 2.7% for the third month in a row. The Fed’s goal is to push the core PCE price index down to 2%.

The central bank made progress on inflation for a while: The core PCE price inflation rate fell from 3.7% in September 2023 to 2.6% in June. But as the inflation rate bumped upward and then stalled out, it’s no coincidence that mortgage rates bounced higher in October.

Homeowners have recoiled from refinancing at these higher interest rates, but home buyers are still applying for loans, according to the Mortgage Bankers Association. That’s despite a significant reduction in buying power in just a month.

Consider a buyer who can afford to pay $2,000 a month in principal and interest. In the last week of September, that buyer could afford to borrow $327,900 at that week’s average interest rate of 6.16%.