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Mortgage rates rose sharply this week, adding uncertainty to the housing market’s short-term outlook.

The 30-year fixed-rate mortgage (FRM) average rose to 6.32 percent from 6.12 percent over the past week, according to lender Freddie Mac.

This is the “largest one-week increase since April,” says Sam Khater, Freddie Mac’s chief economist.

Home financing costs continue to rise despite the Federal Reserve’s recent rate cut of 50 basis points — the first rate cut in four years.

So why are mortgage rates on the way back up? The bond market and investor outlook on the economy’s medium-term future are to blame.

Mortgage rates are generally tied to 10-year Treasury bonds as they tend to have comparable real-world lifespans. The 10-year Treasury yield has risen sharply this month, reaching 4.114 percent on Thursday from 3.740 percent on October 1 — a level not seen since late summer before the Fed’s rate cut.

Investors anticipate a less aggressive pace of rate cuts by the Fed than previously expected. Atlanta Federal Reserve President Raphael Bostic suggested that further rate cuts could be on hold for now as inflation cools at a slower-than-expected pace.

The good news for prospective homebuyers is that the 30-year FRM average is now more than a full percentage point below the average at the same time last year.

However, housing affordability remains challenging for many Americans. A $500,000 mortgage at today’s 30-year FRM average would add $714.31 to monthly payments compared to a 4 percent rate — a level the public has grown accustomed to since the 2010s.

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