Mortgage rates increased for the second week in a row, continuing a trend that has slowed the housing market.
The average rate on a 30-year fixed mortgage rose to 5.66% this week, according to a Freddie Mac survey of lenders released Thursday. That is nearly double the rate from a year earlier and not far from the 5.81% peak reached in June, the highest level since 2008. The average rate was 3.22% at the start of 2022.
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The steady rise has ended an era of ultralow rates that prevailed for much of the past decade. Higher rates and surging home prices have led to larger monthly payments for prospective buyers and, in turn, fewer transactions.
Sales of previously owned homes dropped nearly 6% in July from the previous month to a seasonally adjusted annual rate of 4.81 million, according to the National Association of Realtors. That marked the sixth consecutive monthly decline in sales volume and the slowest pace since 2015, excluding the pandemic-related drop in 2020.
Applications to refinance existing mortgages fell 83% last week from a year earlier, according to data from the Mortgage Bankers Association.
The Federal Reserve has raised its policy rate several times this year in its effort to combat high inflation, and central bank officials have indicated that more increases are on the way.
Mortgage rates typically rise or fall alongside the benchmark 10-year Treasury yield, which has traded above 3.1% for much of this week. The 10-year yield has risen from about 1.3% over the past year.
Write to Charley Grant at charles.grant@wsj.com
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