Mortgage Rates Move Up After Weeks of Dips

After three weeks of declines and a dip below 7%, the 30-year fixed rate mortgage average ticked back up this week to 7.03%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac, released Thursday.

This week’s numbers:

  • The 30-year FRM averaged 7.03 percent as of May 30, 2024, up from last week when it averaged 6.94 percent. A year ago at this time, the 30-year FRM averaged 6.79 percent.
  • The 15-year FRM averaged 6.36 percent, up from last week when it averaged 6.24 percent. A year ago at this time, the 15-year FRM averaged 6.18 percent.

What the experts are saying:

“Following several weeks of decline, mortgage rates changed course this week,” said Sam Khater, Freddie Mac’s chief economist. “More hawkish commentary about inflation and tepid demand for longer-dated Treasury auctions caused market yields to rise across the board. This reality, as well as economic signals that have moved sideways over the last few weeks, have resulted in mortgage rates drifting higher as markets continue to dial back expectations of interest rate cuts.” economist, Jiayi Xu commented: “Earlier this year, the market anticipated the first rate cut to occur in March, but current economic data indicates that a cut is unlikely before September. In addition to the timing of the rate cut, the extent of the cut has also become uncertain. While the March FOMC’s projection aligns with three rate cuts by the end of 2024, more investors are now anticipating just one rate cut this year.

“Regarding the impact on mortgage rates, the Fed is currently allowing data to guide its decisions. For mortgage rates to drop more significantly, the Fed needs to see more evidence of slowing inflation. Overall, we anticipate that slowing inflation and economic growth will allow mortgage rates to decrease to around 6.5% by the end of 2024.

“The housing market for the remainder of the year will continue to depend on mortgage rate activity. As existing homeowners report feeling “locked in” by today’s mortgage rate, many choose not to sell and wait for lower rates. Meanwhile, the increasing listing activities in recent months suggested that other sellers have adjusted their expectations and jumped back into the market. Although inventory remains historically low, it has increased significantly in recent months. This means buyers now have many options and are likely eager to enter the market if affordability improves.” 

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