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Washington, DCCNN — 

Mortgage rates edged further toward 7%, rising for the fifth consecutive week, as the Federal Reserve suggests rate increases will continue amid stubborn inflation.

The 30-year fixed-rate mortgage averaged 6.73% in the week ending March 9, up from 6.65% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 3.85%.

After hitting a 2022 high of 7.08% in November, rates had been trending down. However, they started climbing again in February, rising half a percentage point over the past month. Robust economic data continues to suggest the Federal Reserve is not done in its battle to cool the US economy and will likely continue hiking its benchmark lending rate.

“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” said Sam Khater, Freddie Mac’s chief economist. “Overall, consumers are spending in sectors that are not interest rate-sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Fed signals it will continue with rate hikes

Coming into 2023, inflation seemed to be cooling. But strong employment numbers and a rising Consumer Price Index revealed inflation remains stubbornly high.

In testimony to Congress on Tuesday, Federal Reserve Chairman Jerome Powell said the central bank will likely raise interest rates higher than previously forecast to fight inflation.