Mortgage rates tick higher but remain near 6%

Mortgage rates ticked higher this week, mortgage buyer Freddie Mac said Thursday.

Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage increased to 6.11% from last week's reading of 6.10%. 

The average rate on a 30-year loan was 6.89% a year ago.

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"For the last several weeks, the 30-year fixed-rate mortgage has remained at its lowest level in years," said Sam Khater, Freddie Mac’s chief economist. "The combination of improving affordability and availability of homes to purchase is a positive sign for buyers and sellers heading into the spring home sales season."

The average rate on a 15-year fixed mortgage rose to 5.5% from last week's reading of 5.49%.

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Realtor.com Senior Economist Anthony Smith noted that the 30-year fixed mortgage rate was little changed and ticked marginally higher from the last reading after the Federal Reserve left interest rates unchanged and President Donald Trump nominated former Fed Governor Kevin Warsh as the next Fed chairman.

"The Freddie Mac 30-year fixed mortgage rate held steady this week at 6.11%, up 1 basis point from the previous reading. While the Fed held rates steady at its January meeting, the nomination of Kevin Warsh as the next Federal Reserve chair has re-centered attention on the importance of policy credibility and investor expectations," Smith said.

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"Mortgage rates are not directly set by the Fed but instead reflect long-term yields, which respond to shifting economic signals, market sentiment and perceived risks. If investors grow uncertain about the Fed’s intentions or begin to question its independence, long-term yields can rise even during a rate-cutting cycle," Smith said. "That paradox underscores the risk of mixing political objectives with monetary policy.

"For housing, that means aggressive calls for rate cuts may not lower mortgage rates unless market confidence in the Fed’s inflation-fighting credibility remains intact."

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Smith also said home affordability benefits from low inflation and a stable labor market, coupled with wage growth to boost household purchasing power.

"Whether buying a first home, relocating or moving up, American families need both stable prices and steady income growth. A Fed that is seen as credibly delivering on its dual mandate of price stability and maximum employment is the most durable path to better housing affordability over time," he added.