In Washington, the average rate for a 30-year mortgage has seen an increase for the second consecutive week, reaching its highest point since mid-July. This rise is primarily attributed to a recent surge in the bond yields that lenders typically reference to set their home loan prices.

According to mortgage buyer Freddie Mac, the current rate has climbed to 6.85%, up from 6.72% the previous week. In comparison to a year ago, when the rate averaged 6.61%, the increase is notable. This recent average marks its highest level since the week of July 11, when the rate stood at 6.89%. The rates showed some fluctuation, dipping to a low of 6.08% in September — a two-year low — before peaking at 7.22% in May.

Economists generally expect the average 30-year mortgage rate to remain above 6% throughout the next year, with some predictions suggesting a potential high of 6.8%. This anticipated range aligns with the rates observed this year. Additionally, the average rates for 15-year fixed-rate mortgages, which are often favored by homeowners looking to refinance their existing loans, also rose this week. These rates increased to 6% from 5.92% last week, compared to an average of 5.93% a year prior, according to Freddie Mac.

The combination of high mortgage rates and increasing home prices has made homeownership unattainable for many potential buyers. While there was an uptick in the sales of previously owned homes in the United States in November for the second consecutive month, the housing market is still struggling and is projected to have its worst year since 1995.

Various factors affect mortgage rates, with the yield on U.S. 10-year Treasury bonds being a significant influence. The yields rose last week after indications from the Federal Reserve suggested that smaller rate cuts are likely next year than previously expected. Although the central bank does not directly set mortgage rates, its policies and the ongoing trends in inflation deeply affect the movements of the 10-year Treasury yield.

One of the most uncertain factors regarding mortgage rates for 2024 is how President-elect Donald Trump’s policy plans might affect inflation and the national debt, potentially keeping mortgage rates high. Changes in inflation rates, the U.S. deficit, and overall economic health will likely impact the 10-year Treasury yield. Recently, this yield which had been below 3.7% as of September, reached 4.61% during midday trading on Thursday.