US mortgage rates climb to their highest level since November | CNN Business

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US mortgage rates jumped higher last week as uncertainty about the debt ceiling standoff sent bond yields rising

The 30-year fixed-rate mortgage averaged 6.79% in the week ending June 1, up from 6.57% the week before, according to data from Freddie Mac released Thursday. Rates jumped higher last week for the third week in a row. A year ago, the 30-year fixed-rate was 5.09%. Mortgage rates tend to be pegged to US Treasury yields, which had been heading higher as America grows ever closer to default.

This, “has the potential to cause short-term liquidity challenges at banks, as businesses and households may reallocate their funds towards higher-yielding and relatively safer government debt.” “In order to keep attracting depositors, banks might be compelled to raise interest rates, thereby squeezing profit margins,” she said. “This could lead to further rate increases across various loan products offered by banks, including both business loans and personal loans.

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