Average mortgage rates rise, hit highest point in seven weeks

Strong economic trends sent all average mortgage rates climbing, with 30-year fixed-rate ascending to its fourth-highest level of the year, according to Freddie Mac.

"The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months," said Freddie Mac Chief Economist Sam Khater. "Yesterday, the Federal Reserve passed on raising short-term rates, but with the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in coming months."

"Even with home price growth easing slightly in some markets, mortgage rates hovering near a seven-year high will certainly create affordability challenges for some prospective buyers looking to close," Khater added.

The 30-year fixed-rate mortgage averaged 4.6% for the week ending August 2, up six basis points from last week. At this time a year ago, the 30-year fixed-rate mortgage averaged 3.93%.

Yields on the 10-year Treasury note, a key indicator in pricing 30-year fixed-rate mortgages, kept going up since last week and broke the 3% barrier.

The 15-year fixed-rate mortgage also rose six basis points this week and averaged 4.08%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.18%.

The average five-year Treasury-indexed hybrid adjustable-rate mortgage went up six basis points as well, to 3.93%. The five-year adjustable-rate mortgage averaged 3.15% at this time last year.

"Mortgage rates trended higher over the past week as President Trump and European Commission President Juncker agreed to avert a trade war toward the end of the week, easing some of the trade tensions that had been putting downward pressure on rates," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on Aug. 1.

The strong economic data released on July 27 was largely expected and already priced into interest rates. This was reinforced in the Aug. 1 Federal Open Market Committee statement, and that solidified market expectations for future rate hikes this year, he said.