Mortgage rates ticked higher to 6% 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% from last week’s reading of 5.98%.
The average rate on a 30-year loan was 6.63% a year ago.
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“In fact, rates are down nearly a full percentage point from this time in 2024, spurring activity from buyers, sellers and owners,” said Sam Khater, Freddie Mac’s chief economist. “As a result, refinance activity is up, and purchase applications are ahead of last year’s pace.”
The average rate on a 15-year fixed mortgage increased to 5.43% from last week’s reading of 4.44%.
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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 4.14% as of Thursday afternoon as oil prices moved higher due to the war in Iran.
“The launch of the conflict in Iran over the weekend and its subsequent escalation has stoked fears of wartime inflation that are driving the 10-year Treasury yield higher, and we expect mortgage rates to follow suit,” said Realtor.com senior Joel Berner.
He added that although market conditions – including lower prices, higher inventory and lower mortgage rates – are positive for buyers so far, consumer confidence has weighed on sales activity.
“Economic uncertainty is not a position from which many people are interested in making the largest purchase of their life, and the conflict in Iran just added to the anxiety pile that already included tariffs, last year’s soft labor market, stock market volatility, and AI job loss concerns,” Berner said.
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