Mortgage rates are moving slightly, but not in the direction homebuyers want to see.
The weekly average rate for a 30-year fixed-rate mortgage in the U.S. inched up to 6.6% as of Thursday, a 0.01 percentage point increase from the previous week, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.
“Mortgage Rates Hold Steady,” a post on the Freddie Mac site declared, adding that the U.S. “economy remains resilient, demonstrated by steady consumer spending and rising household incomes.”
Along with little change in rates, the post noted that, “More homes coming on the market and slower price growth in many areas are giving buyers better options and helping create a more balanced housing market.”
The new weekly average ends two weeks of declines but remains higher than a year ago.
Daily mortgage rate trackers show a similar pattern. The daily index at Mortgage News Daily was at 6.75% Thursday for the same type of mortgage after a 0.01 percentage point increase Wednesday.
The Wall Street Journal reported Thursday that “borrowers shouldn’t expect mortgage rates to significantly fall anytime soon,” citing the economic impacts of the ongoing war against Iran launched by the U.S. and Israel at the end of February.
Before the conflict began, mortgage rates had slipped below 6% for the first time since 2022. But the war is fueling inflation concerns, resulting in higher costs to consumers including when it comes to financing a new home.
A new report on housing affordability in Salt Lake County released this week by the Salt Lake Board of Realtors blamed “geopolitical tensions and new inflation data” for the rapid rise in mortgage rates over the past months.
“This spike — compound by restricted housing supply and high development costs — has created cascading unaffordability,” the report stated, adding that rates are expected to “remain elevated throughout the year.”
The effect of lower mortgage rates on affordability was spelled out in the report. A drop from 6.41% to 5.41% would reduce the amount of household income needed to afford a typical home in Salt Lake County from nearly $187,000 to just under $172,000.