Mortgage rates are inching up after reports of hotter-than-expected inflation data showed continued strength in the U.S. economy.
With inflation still over its 2% target alongside a robust job market, the market is anxious about when the Fed will start cutting its benchmark interest rate, which is currently keeping mortgage rates elevated.
The 30-year fixed-rate mortgage averaged 6.77% as of Feb. 15, according to data released by Freddie Mac
FMCC,
on Thursday.
That’s up 13 basis points from the previous week. One basis point is equal to one hundredth of a percentage point.
Mortgage rates were last at this level in mid-December, when rates fell below 7% for the first time since August.
A year ago, the 30-year mortgage rate was averaging 6.32%.
As of Feb. 15, the average rate on the 15-year mortgage was 6.12%, up from 5.9% last week. The 15-year rate was at 5.51% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data from Mortgage News Daily showed the 30-year fixed-rate mortgage averaging 7.03% as of Thursday afternoon.
What Freddie Mac said: “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier,” he added.
What are they saying? “Mortgage rates have been volatile due to strong employment data, rising last week and leading to a 2% drop in applications,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement.
“Increasing supply levels and lower mortgage rates would be the two main drivers of any meaningful jump in home sales this spring,” he added.
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