Mortgage rates rose slightly from last week, continuing to pressure potential homebuyers.
The average rate on the 30-year fixed-rate mortgage rose to 6.78% from 6.77% a week prior when they hit the lowest level since mid-March, Freddie Mac reported on Thursday. A year ago, the average rate on a 30-year fixed-rate loan was 6.81%.
Separately, the average rate for the 15-year fixed mortgage was 6.07%, up from 6.05% a week prior. The rate on a 15-year loan was 6.11% a year ago.
Rates still remained lower than in late April and May when they topped 7%.
“Mortgage rates essentially remained flat from last week but have decreased nearly half a percent from their peak earlier this year," Sam Khater, Freddie Mac’s chief economist, said in the press release.
Read more: Mortgage and refinance rates today, July 25, 2024: 30-year rate holds at 6.50%
That hasn't been enough to spur buyer appetite. Applications for a mortgage to purchase a home fell 4% from the prior week on a seasonally adjusted basis.
Recently released June data shows that new homes have been dwindling. Mortgage applications to purchase new homes fell 16% from May to June, per the Mortgage Bankers Association, while sales of newly built homes hit a seven-month low, reinforcing the ongoing challenges of high mortgage rates and record home prices keeping a lid on buyer activity.
Meanwhile, more homeowners rushed to refinance their mortgages. Applications to refinance a home loan ticked up 0.3% last week from the previous week, the Mortgage Bankers Association reported, and the highest level since September 2022.
Read more: Mortgage refinancing: How to get started
Investors are optimistic a Federal Reserve rate cut is on the horizon. Market observers are confident that the first rate cut of the year will be September amid a slowdown in inflation and a cooler labor market. However, some predict that the Fed’s actions won’t have a dramatic influence on mortgages immediately.
“Mortgage rates aren't likely to move meaningfully lower over the second half of 2024, even if the Fed starts cutting rates in September as the market currently expects, “ said Parker Ross, global chief economist at Arch Capital Group. He said that's because markets are already pricing in about six cuts over the next year.
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.