Mortgage rates have edged up slightly after hitting a two-year low last week, according to Freddie Mac’s latest Primary Mortgage Market Survey released on Thursday.
The average rate for a 30-year fixed mortgage rose to 6.12%, up from 6.08% the previous week. A year ago, the rate stood significantly higher at 7.49%.
Freddie Mac’s chief economist, Sam Khater, attributed the stalled decline in rates to a combination of geopolitical tensions and a rebound in short-term rates. This has tempered the market’s optimism about potential rate cuts.
Despite the slight uptick, Khater remains optimistic about the broader housing market trends.
“Mortgage rates have dropped by one and a half percentage points over the past year, home price growth is slowing, inventory is rising, and incomes continue to grow,” Khater noted.
These factors, he said, create a more favorable environment for homebuyers this fall, with improvements likely continuing through the rest of the year.
The 15-year fixed mortgage rate also saw a small increase, rising to 5.25% from 5.16% the previous week. This rate was 6.78% a year ago.
Mortgage rates are influenced by several factors, including the Federal Reserve’s interest rate policy, which impacts the bond market and the yield on the 10-year Treasury note. On Thursday, the yield on the 10-year Treasury rose to 3.82%, up from 3.78% the week before, helping to push mortgage rates slightly higher.
Although rates have increased this week, they remain below the 2024 peak of 7.22% seen in May. Economists generally expect rates to hover around their current levels through the end of the year. Fannie Mae projects the average rate on a 30-year mortgage will be 6.2% in the final quarter of 2024, with a possible decline to 5.7% in the same quarter next year.
FOX Business, ABC News, and USA Today contributed to this report.
