close video Fed doesn’t need to rush to cut interest rates, strategist says

Osaic chief market strategist Phil Blancato discusses the Fed’s interest rate plans and the impact of tariffs on inflation on ‘Making Money.’

Mortgage rates spiked this week, mortgage buyer Freddie Mac said Thursday, as President Donald Trump's tariffs led to instability in the bond market.

Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage increased to 6.83% from last week's reading of 6.62%. 

The average rate on a 30-year loan was 7.1% a year ago.

"The 30-year fixed-rate mortgage ticked up but remains below the 7% threshold for the thirteenth consecutive week," said Sam Khater, Freddie Mac’s chief economist. "At this time last year, rates reached 7.1% while purchase application demand was 13% lower than it is today, a clear sign that this year’s spring homebuying season is off to a stronger start."

Mortgage rates track the 10-year Treasury yield, which traded at 4.5% last week. The 10-year was trading above 4.3% as of Thursday afternoon, though still far above the sub-4% levels seen as recently as April 4.

Higher yields translate into higher borrowing costs for consumers and businesses, while potentially making bonds more competitive investments against stocks.

IS THE US HOUSING MARKET BECOMING A BUYER-FRIENDLY MARKET?

The average rate on the 15-year fixed mortgage also ticked higher to 6.03% from last week's reading of 5.82%. One year ago, the rate on the 15-year fixed note averaged 6.39%.

Reuters contributed to this report.