Mortgage Rates Rise Slightly: What It Means for Homebuyers


This week, the average rate on a 30-year mortgage in the U.S. nudged up to 6.12%, marking the first increase in seven weeks. This is a slight jump from last week’s 6.08%, according to Freddie Mac, but still significantly lower than last year’s 7.49%.

Last week, rates hit their lowest point in two years, giving homebuyers a bit more purchasing power, even as home prices remain near record highs. While this week’s increase may seem minor, it’s important to keep an eye on trends, especially if you’re actively house hunting.

What About 15-Year Mortgages?

If you're considering refinancing, the average rate on a 15-year fixed-rate mortgage also edged up this week, rising to 5.25% from 5.16% last week. Still, it's well below last year’s 6.78%, so it could be a good time to explore refinancing options if you want to lock in a lower rate for the long term.

Why Are Rates Moving?

Mortgage rates are influenced by a variety of factors, including changes in the bond market and the Federal Reserve’s interest rate policies. For instance, the 10-year Treasury yield, which helps guide mortgage rates, rose slightly this week to 3.82%. Rates have generally been trending down since July, thanks in part to the Fed's recent decision to cut interest rates for the first time in four years.

What’s the Outlook for Rates?

Looking at the bigger picture, things are still positive for homebuyers. Freddie Mac’s Chief Economist, Sam Khater, points out that mortgage rates have dropped about 1.5% over the last year, home price growth is slowing, inventory is increasing, and incomes are on the rise. This means the market is becoming more favorable for buyers heading into the fall and beyond.

Even though rates may fluctuate in the short term, economists expect them to hover around current levels for the rest of the year. Fannie Mae predicts the 30-year mortgage rate will average 6.2% by the end of this year and dip to 5.7% by late next year.

What Does This Mean for You?

Though rising mortgage rates can add to your monthly payments, the overall outlook is encouraging for buyers. With rates down from their peak of 7.8% in October 2023 and home prices stabilizing, the market is offering more opportunities for those ready to buy. Now could be a great time to explore your options before rates potentially rise again.

Keep an eye on the market, and feel free to reach out if you want to discuss how current mortgage rates might impact your home search!

Original article at: Average rate on a 30-year mortgage in the U.S. ticks up to 6.12%, first increase in 7 weeks - ABC News (go.com)

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