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The average long-term U.S. mortgage rate rose this week for the second week in a row, according to weekly data compiled by mortgage buyer Freddie Mac.
The rate on the 30-year fixed mortgage climbed to 6.43% this week, up from 6.39% a week ago. One year ago, it averaged 5.10%.
"The 30-year fixed-rate mortgage increased modestly for the second straight week, but with the rate of inflation decelerating rates should gently decline over the course of 2023," said Sam Khater, Freddie Mac’s chief economist.
"Incoming data suggest the housing market has stabilized from a sales and house price perspective," Khater continued.
Meanwhile, the average rate on a 15-year fixed mortgage fell this week to 5.71%. Last week it averaged 5.76%.
"The prospect of lower mortgage rates for the remainder of the year should be welcome news to borrowers who are looking to purchase a home," he said.
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A “For Sale” sign outside of a home in Atlanta, Georgia, US, on Friday, Feb. 17, 2023. Photographer: Dustin Chambers/Bloomberg via Getty Images | Getty Images
Rates for 30-year mortgages usually track the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can also influence rates on home loans.
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The Fed has raised its benchmark rate nine times in just over a year. At their meeting last month, Fed policymakers projected they will only hike rates again this year once more, in May.
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Many economists also expect the Fed will pause its rate increases after next month, reflecting worries that the fallout from the collapse of two major banks in March could lead the banking industry to reduce lending, weakening the economy.
The Associated Press contributed to this report