Mortgage rates have resumed heading higher after a short-lived reprieve, according to Freddie Mac’s latest data.

The 30-year, fixed-rate mortgage averaged 7.03% in the week ended May 30, up from 6.94% the previous week and up from the comparable week this time last year when it stood at 6.79%, the mortgage giant said Thursday. The 15-year, fixed-rate mortgage climbed to 6.36%. That’s higher than last week when it averaged 6.34% but still above a year earlier when it was 6.18%.

It’s the first increase in average mortgage rates in three weeks. As of Wednesday, the current 30-year, fixed-rate mortgage stood at 7.29% and the current 15-year, fixed-rate mortgage was at 6.76%, according to data from Mortgage News Daily.

The recent upswing comes as markets are awaiting incoming economic data, including Friday’s Personal Consumption Expenditure report, the Federal Reserve’s preferred measure of inflation. That report will determine the Fed’s tone in the coming months as it weighs cutting its federal funds rate, a decision that will in turn affect mortgage rates.

“Over the past few years, it's most common to see the biggest rate volatility in response to key inflation reports, jobs reports or Fed announcements. None of the above have been present during the recent uptrend,” Matthew Graham, chief operating officer at Mortgage News Daily, wrote in a post on Wednesday. “Bottom line: the recent pain isn't necessarily a sign of things to come. It will ultimately depend on the tone of the new economic data in the coming days.”

As the industry braces for more data and an update from the Fed, “markets continue to dial back expectations of interest rate cuts,” according to Freddie Mac’s Chief Economist Sam Khater. That, too, is putting upward pressure on mortgage rates.

Increases in rates are depressing buyer demand, a shift in sentiment that is already showing up in various data.

Mortgage application activity fell to its lowest level since early March in the week ended May 24, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey released Wednesday. The survey’s unadjusted index measuring purchase applications dropped 3% from the previous week and 10% from the same week one year ago.

At the same time, homebuyer affordability declined in April as the national median payment applied for by purchase applicants climbed to $2,201 in March, according to data from the Mortgage Bankers Association Purchase Applications Payment Index released Thursday. Compared to the same time last year, payments are up 6.8%. The index, a measure of monthly mortgage payments, also increased, indicating that the ratio of mortgage payments to income is higher.

“Homebuyer affordability conditions declined further as mortgage rates remained above 7 percent in April, sidelining many prospective buyers from entering the housing market,” Edward Seiler, MBA’s associate vice president, said in a statement. “In addition to lower mortgage rates, more housing inventory is desperately needed in markets throughout the country this summer to alleviate these tough affordability conditions.”

Some buyers getting pushed out of the market are turning to apartments or single-family house rentals as an alternative to buying. But that could change if the housing supply for sale keeps growing.

In March, sales of pre-owned single-family houses, condos and co-ops were held back by higher rates, according to data from the National Association of Realtors.

But despite weak sales, the supply of existing homes grew to its highest level since October 2021. If combined with positive economic data and lower rates, that could mean a better market for buyers.