While mortgage rates hit a high for the year so far, reflecting escalating geopolitical tensions in the Middle East, analysts point to average rates still remaining below year-ago levels and offering some improvement to buyers purchasing power.
The average mortgage rate ticked up 11 basis points to 6.22% this week, up from 6.11% last week, according to the latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday.
“The 30-year fixed-rate mortgage edged up this week to 6.22% but remains nearly half a percentage point lower than the same time last year,” said Sam Khater, Freddie Mac’s chief economist. “Potential homebuyers are poised for a more affordable spring homebuying season than last with the market experiencing improvements in purchase applications and pending home sales.”
Realtor.com Senior Economist Anthony Smith stated, “The 11 basis point increase reflects escalating geopolitical tensions that continue to drive volatility across financial markets. Rising energy prices and renewed trade uncertainty have lifted inflation expectations, putting upward pressure on longer-term interest rates and, in turn, mortgage rates.”
But he noted that even with the anticipated increase, mortgage rates remain below year-ago levels, offering some improvement in purchasing power compared to last spring. “This is particularly meaningful in regions like the South and West, where inventory has rebounded more significantly and buyers are beginning to regain leverage as more options become available. Nationally, active listings are up 7.9% year over year, reinforcing a gradual shift toward more balanced market conditions.”
However, Smith cautioned that the return of market volatility poses a clear risk to the fragile progress seen earlier this year.
“As rates approached multi-year lows, buyer interest began to show signs of life, but sustained momentum depends on more than just borrowing costs. Elevated uncertainty could once again sideline both buyers and sellers, echoing the hesitant market conditions seen last year. For the spring season to gain traction, households will need greater confidence in the economic outlook alongside improved affordability,” he said.
For the full Freddie Mac report, click here.
