Mortgage rates inch higher

Mortgage rates are up slightly, with long-term notes lifting off a two-year low from last week.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage inched up to 6.12% from last week’s reading of 6.08%. The average rate on a 30-year loan was 7.49% a year ago.

“The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature,” said Sam Khater, Freddie Mac’s chief economist. 

“Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise,” Khater continued. “As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.”

Many would-be buyers and sellers are holding out to see if rates fall further. Currently, about 80% of mortgage holders have a rate below 5%, according to a Zillow survey.

The average rate on the 15-year fixed mortgage also rose slightly to 5.25% from 5.16% last week. One year ago, the rate on the 15-year fixed note averaged 6.78%.