Mortgage rates marched higher for the sixth straight week while purchase demand continues to decline in the stagnant housing market.
Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage surged to 6.79% from last week's reading of 6.72%. The average rate on a 30-year loan was 7.50% a year ago.
A home available for sale is shown on May 22, 2024, in Austin, Texas. (Brandon Bell/Getty Images / Getty Images)
"It is clear purchase demand is very sensitive to mortgage rates in the current market environment," said Sam Khater, Freddie Mac's chief economist. "As soon as rates began to rise in early October, purchase applications fell and over the last month have declined 10 percent."
Many would-be buyers and sellers are holding out to see if rates fall further. Currently, about 80% of mortgage holders have a rate below 5%, according to a Zillow survey.
The average rate on the 15-year fixed mortgage also rose to 6% from 5.99% last week. One year ago, the rate on the 15-year fixed note averaged 6.81%.