The average rate on a 30-year mortgage in the U.S. rose for the third week in a row, reaching its highest level in eight weeks.

The rate rose to 6.44% from 6.32% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.63%.

The last time the average rate was higher was on August 22, when it was 6.46%.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield on the 10-year Treasury was 4.09% Thursday, up from 3.62% in mid-September, just days before the Fed slashed its benchmark lending rate by a half a point.

The average rate on a 30-year mortgage has been rising since reaching its lowest level in two years — 6.08% — three weeks ago. The rate remains well below the 7.22% it hit in May, its 2024 peak.

Mortgage rates have been climbing in recent weeks following a spate of encouraging reports on the U.S. economy, including a hotter-than-expected September jobs report and a snapshot of consumer prices.

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“While we expect the long-run trend in mortgage rates to be downward, recent weeks have brought volatility,” said Ralph Mclaughlin, senior economist at Realtor.com.

Generally, higher rates reflect the strength in the economy, which helps support the housing market. But as mortgage rates rise they can also add hundreds of dollars a month in costs for borrowers, reducing home shoppers’ purchasing power as they navigate a housing market with prices near all-time highs.

Rising rates can also discourage homeowners who locked in a lower rate on their existing mortgage to list their home for sale if it means taking on a loan on a new home at a far higher rate.

The housing market has been in a sales slump since 2022 as elevated mortgage rates put off many would-be homebuyers. Sales of previously occupied U.S. homes fell in August even as mortgage rates began easing.

The recent uptick in mortgage rates may already be discouraging some would-be home shoppers. Mortgage applications fell 17% last week from the prior week, according to the Mortgage Bankers Association.

Applications for loans to refinance a mortgage fell 26%, though they were still more than double what they were a year ago, when rates were higher.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also increased this week. The average rate rose to 5.63% from 5.41% last week. A year ago, it averaged 6.92%, Freddie Mac said.

Economists generally expect mortgage rates to remain near their current levels, at least this year. Fannie Mae projects the rate on a 30-year mortgage will average 6.2% in the October-December quarter and decline to an average of 5.7% in the same quarter next year.

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