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Average 30-year mortgage rate inches up to 4.52 percent

Long-term U.S. mortgage rates ticked up this week as borrowing costs are meaningfully higher than a year ago.

Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages rose slightly to 4.52 percent from 4.51 percent last week. The rate averaged 3.82 percent a year ago. Average rates began to climb after the tax cuts signed into law last year by President Donald Trump increased the federal budget deficit, as home loans generally move in sync with interest on 10-year Treasury notes.

The average rate on 15-year, fixed-rate loans fell to 3.97 percent this week from 3.98 percent last week.

Because of rising home prices and borrowing costs, affordability has become a challenge for many would-be homebuyers and depressed sales of existing homes for the past four months.

An analysis released Thursday by realtor.com found that the monthly costs of owning a home have climbed 14 percent in the past year. As a result, the median monthly cost to buy a home was $1,647, almost $400 more than the average monthly cost to rent a home.

Mortgage rates are going up as house prices are falling and that's ...

Risks rising

The hikes so far should be no more than an aggravation. A bit more aggravation for Suncorp customers given they have been hit with the second rise in the past six months.

If the hike is unaffordable, the borrower should never have been sold the loan in the first place — but that is another story and the subject of some scrutiny at the banking royal commission .

As the RBA has repeatedly pointed out, it won't be particularly anxious about modest out-of-cycle hikes. The RBA's view is they are basically reversing an overall decline over the past year or so as lenders slugged it out for market share.

Australia is a long way from recession, but the risks are rising according to Capital Economics's Paul Dales.

Mr Dales laid out three conditions for an Australian recession, or financial crisis within the next five years:

A big fall in house prices A big tightening in credit conditions A big rise in mortgage rates, or some combination of