Mortgage rates rise, hitting demand

Mortgage rates climbed this week, sending overall demand lower as more Americans balked at refinancing.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage jumped to 6.72%, up from last week’s reading of 6.6%. The average rate on a 30-year loan was 6.67% a year ago.

“This week, mortgage rates crept up to a similar average as this time in 2023,” said Sam Khater, Freddie Mac’s chief economist. “For the most part, mortgage rates have moved between 6 and 7 percent over the last 12 months. Homebuyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home, resulting in additional purchase activity.”

The average rate on the 15-year fixed mortgage climbed to 5.92% from 5.84% last week. One year ago, the rate on the 15-year fixed note averaged 5.95%.

The Mortgage Bankers Association (MBA) on Wednesday reported that mortgage applications fell 0.7% overall on a seasonally adjusted basis from a week earlier thanks to the increase in rates, which caused a 3% drop in refinancing applications.