The average interest rate on 30-year mortgages in the U.S. has risen to its highest level since early February, further driving home buyers’ borrowing costs.

Mortgage buyer Freddie Mac said Thursday it increased from 6.86% last week to 6.89%. A year ago, the interest rate averaged 7.03%.

The borrowing costs of fixed-rate mortgages in 2015 are also very popular, and homeowners have also increased refinancing in home loans. From 6.01% last week, the average interest rate is up to 6.03%. Freddie Mac said that is still down from 6.36% a year ago.

Mortgage rates are affected by several factors, from Fed’s interest rate policy decisions to bond market investors’ expectations about the economy and inflation. The key barometer is 10 years of fiscal gains that lenders use as a guide to pricing home loans.

Bond yields have been rising, reflecting uncertainty among bond market investors about the Trump administration's ever-changing tariff policies and fears of blowing up federal government debt.

The 10-year fiscal yield for trading at noon Thursday was 4.43%, down from 4.47% in the second half of Wednesday.

The average interest rate for 30-year mortgages is relatively close to the height of more than 7% in mid-January this year. So far, the low of the average rate was six weeks ago, when it briefly dropped to 6.62%. After three consecutive weeks of rising, the average rate average since February 6 was the highest, when the average rate was 6.89%.

High mortgage rates could increase borrowers’ fees of hundreds of dollars a month, reducing purchasing power for many potential homebuyers this year. This helped to trace the U.S. housing market sales downturn back to 2022, when mortgage rates began to rise from the rock bottom lows they reached during the pandemic.

Last year, sales of previously occupied U.S. homes fell to a minimum in nearly 30 years. Sales last month hit the slowest pace between April and 2009.

Rising mortgage rates helps reduce sales during peak home sales in the year. As home loan borrowing costs rise, mortgage applications fell 1.2% last week from a week ago, according to the Mortgage Bankers Association. Loan applications for buying a home increased by 18% compared with the same period last year.

New data suggests that sales may slow further in the coming months. A pending U.S. home sales index last month fell 6.3% from March, down 2.5% from April last year, the National Association of Realtors said Thursday.

There is usually a one or two month lag between contract signing and when the sale is completed, which makes future home sales the leader in future home sales.