Mortgage rates inched up for the second week in a row—and a key benchmark’s reaction to inflation data suggests they will remain near current levels in the near term.
The average 30-year fixed mortgage rate this week was 6.66%,
Freddie Mac
said Thursday. The rate is up slightly from the prior week’s 6.62% reading, but well below the 7.79% high at the end of October.
Mortgage rates’ slump from recent highs is good news for buyers planning to shop for a home this spring. The drop in rates “has marginally increased home buyer demand,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
But it could be a double-edged sword—particularly if home listings remain in short supply. “This slight uptick in demand, combined with inventory that remains tight, continues to cause prices to rise faster than incomes, meaning affordability remains a major headwind for buyers,” Khater said. “Potential home buyers should look closely at existing state and local resources, such as down payment assistance programs, which can considerably help defray closing costs.”
Home buyers may have to wait longer for more favorable mortgage rates. The Consumer Price Index, published on Thursday morning, had the potential to move rates—but the reaction of a key mortgage rate benchmark was relatively muted. The 10-year Treasury yield, with which mortgage rates often move, initially climbed after December’s hotter-than-expected inflation reading, and has swung between slight gains and losses in the hours since.
As of early afternoon, the yield was 4.044, up a slight 0.003 percentage point. Builder stocks, relatedly, were broadly lower, with the
iShares U.S. Home Construction
exchange-traded fund down 0.4%.
Write to Shaina Mishkin at [email protected]
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