Mortgage rates climbed this week, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage rose to 6.11% from last week’s reading of 6%.
The average rate on a 30-year loan was 6.65% a year ago.
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“Despite the modest uptick, buyers are responding to rates in this range, with existing-home sales increasing 1.7% in February,” said Sam Khater, Freddie Mac’s chief economist. “Purchase applications also increased this week, a welcome sign as buyers enter spring homebuying season with rates down more than half a percentage point compared to the same time last year.”
RENT BECOMING MORE AFFORDABLE FOR MANY AMERICANS AS MARKET STABILIZES
RENT BECOMING MORE AFFORDABLE FOR MANY AMERICANS AS MARKET STABILIZES
The average rate on a 15-year fixed mortgage increased to 5.5% from last week’s reading of 5.43%.
Mortgage rates are affected by several factors, including the Federal Reserve and geopolitics. Though mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield hovered around 4.23% as of Thursday afternoon as oil prices moved higher due to the war in Iran.
“The ongoing conflict in Iran has stoked fears of wartime inflation, sending yields on the 10-year Treasury climbing and driving mortgage rates higher,” said Hannah Jones, Realtor.com senior economic research analyst. “This shift comes despite last week’s jobs data being weaker than expected, with unemployment ticking up to 4.4% and nonfarm payroll employment falling by 92,000 jobs. Inflation also drifted lower in February, with headline inflation holding steady at 2.4% and core inflation at 2.5%. Under normal circumstances, these soft economic readings would put downward pressure on mortgage rates. However, the news out of the Middle East is overriding those signals.”
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