Mortgage rates continued their upward trudge this week, with the 30-year fixed rate reaching a year-to-date weekly high of 6.76%, Freddie Mac reported Thursday.

That is the highest weekly average for 30-year mortgages in nearly 15 months and is 41 basis points above the year-ago mark.

Both 30-year and 15-year fixed-rate mortgages rose five basis points this week, with the 15-year’s 6.09% average also representing a year-to-date high. It is now 59 bps higher year over year.

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The Mortgage News Daily Rate Index, which factors upfront mortgage costs into its survey data, put the 30-year rate at 7.07% on Thursday.

Sam Khater, Freddie Mac’s chief economist, stressed homebuying discipline in his weekly quote, telling aspiring buyers that “shopping around for the best mortgage rate and getting multiple quotes can potentially save them thousands.”

Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), had a more downbeat outlook, saying in market commentary shared with Scotsman Guide that the 15-month highs are “straining affordability despite improved housing inventory.”

The MBA chief flagged rate pressure on refinance demand, which dipped 6% during the week ending Sept. 4, according to association data. Overall mortgage demand skidded 2.7% last week on a seasonally adjusted basis, propped up by an increased share of loans backed by the Federal Housing Administration.

Broeksmit said next week’s Federal Open Market Committee meeting “will be key, as the inflation and economic outlook will help shape the path of rates and homebuyer demand.”

That rate-setting committee of the Federal Reserve still awaits consumer price index inflation data set for release Friday. But wholesale inflation measured by the producer price index spiked 0.4% in August, the Bureau of Labor Statistics reported Thursday, raising the likelihood the Fed will hike the benchmark borrowing rate next week.

Those odds stood around 70% following Thursday’s supply-chain inflation report, up from around 60% the prior day, according to CME FedWatch.

A rising tide lifts all boats, the typical thinking goes as it relates to Fed rate hikes trickling through to longer-dated Treasury yields that feed into mortgage rates.

But Melissa Cohn, regional vice president of William Raveis Mortgage, thinks monetary tightening by the Fed “could actually provide relief in the bond market” and drive mortgage rates lower, as it would demonstrate that the central bank is serious about addressing above-target inflation.

“I think it would be prudent if they hike rates,” Cohn said in emailed commentary, “and I think the bond market would react favorably, bond yields would go down, and mortgage rates would go down.”

Driven by a surge in oil prices that fueled broader inflation concerns, the 10-year Treasury yield breached the 4.9% threshold Thursday, its highest level since October 2023. The 30-year Treasury yield soared past 5.36% Thursday afternoon, its highest intraday mark since June 2007.