Mortgage rates increased for the third week in a row to the highest point since July, though evidence suggests some homebuyers may be getting more used to a new normal.
The average for a 30-year, fixed-rate home loan rose to 6.91% as of Thursday, up from 6.85% a week earlier, mortgage giant Freddie Mac said Thursday. During the same period of 2024, the rate was 6.62%.
The 15-year, fixed-rate mortgage averaged 6.13%, up from 6% in the prior week. A year earlier, the rate was 5.89%.
“Compared to this time last year, rates are elevated and the market’s affordability headwinds persist," Sam Khater, Freddie Mac’s chief economist, said in a statement. "However, buyers appear to be more inclined to get off the sidelines as pending home sales rise.”
Mortgage rates remain elevated despite recent interest rate cuts. That's because the 10-year Treasury yield, an indicator that drives longer-term interest rates such as mortgages, jumped after the election and this week remained close to its highest level in several months.
The number of mortgage applications dropped 21.9% from two weeks earlier, according to the Mortgage Bankers Association, though the trade group said recently that an increasing supply of homes for sale and economic optimism have kept buyers in the market.
Daily mortgage rates, often more volatile than weekly rates, also remain elevated.
The 30-year, fixed-rate mortgage stood Thursday at 7.07%, while the 15-year rate was 6.48%, according to Mortgage News Daily.
Current rates are not high compared to historical standards, according to Justin Benefield, academic director for Auburn University's Winchester Institute for Real Estate Development. While not all would-be buyers accept the higher rates, many realize there's no use postponing such a major decision, he noted.
"Rates are where they are going to be, and you're not going to see a big drop anytime soon," Benefield said in an interview. "So if you have to make a move, you have to make a move."