Mortgage rates shifted slightly upward this week due to elevated inflation, and the hope for relief may be further delayed, according to the latest data from Freddie Mac.
The latest Primary Mortgage Market Survey® saw the 30-year fixed rate mortgage (FRM) average 6.49%, up from 6.43% last week when it was at the lowest level seen since mid-May. The 15-year FRM averaged 5.82%, up from 5.79% last week.
Despite the slight increases, both the 30-year and 15-year FRMs are lower than they were at the same time last year (6.72% and 5.86%, respectively).
Sam Khater, Freddie Mac’s chief economist, noted that as of late mortgage rates “have not changed much,” but homebuyers have been seeing improvement due to “economic growth and housing affordability.”
A potential end to the conflict with Iran had many in the industry hoping for a relief from rate increases and a return to a downward trend in the coming months. While a ceasefire was on the table, recent reports suggest the Iranian conflict may yet persist, which Realtor.com® Senior Economist Joel Berner said could continue to affect mortgage rates.
He noted that interest rates saw a rise this week as the renewal of the conflict “has stoked fears of further inflation and geopolitical instability.” Additionally, Berner said the price of oil increased this week, which is the primary way the Iranian conflict has been affecting inflation, interest rates and thereby mortgage rates.
“Mortgage rates looked like they were poised for a retreat in recent weeks, but the deterioration of the situation in Iran has put them on an upward trajectory yet again,” he continued. “The Fed is unlikely to provide any downward pressure to interest rates despite a somewhat soft jobs report last week, so last week’s Freddie Mac readout may serve as a low-water mark for some time, especially if tensions in the Middle East continue their resurgence.”
