Mortgage rates rose this week as the latest Consumer Price Index report further dashed hopes in some minds for a Federal Open Market Committee reduction in short-term rates at its July meeting.
“The 30-year fixed-rate mortgage inched up this week and continues to stay within a narrow range under 7%,” said Sam Khater, Freddie Mac chief economist, in a press release. “While overall affordability headwinds persist, rate stability coupled with moderately rising inventory may sway prospective buyers to act.”
The 30-year fixed rate mortgage averaged 6.75% as of July 17, according to the Freddie Mac Primary Mortgage Market Survey. This is up from last week when it was 6.72%, but slightly lower than a year ago at this time, when the rate was 6.77%.
Meanwhile, the 15-year FRM rose 6 basis points to 5.92%, up from last week when it averaged 5.86%. For the same week in 2024, this product averaged 6.05%.
As of 11 a.m. Thursday morning, the 10-year Treasury was at 4.43%, following another roller coaster week, where it rose as high as 4.49% (including at one point on Thursday) and as low at 4.38%.
At that time, Lender Price data as published on the National Mortgage News website put the 30-year FRM at 6.889% compared with 8.834% at that time one week earlier
Zillow’s rate tracker had the 30-year FRM at 6.625, unchanged from seven days prior.
Mortgage rate movements this week were “influenced by concerns that persistent inflation may delay the timing and extent of future interest rate cuts from the Federal Reserve,” said Kara Ng, senior economist at Zillow, in a July 16 blog post.
While headline CPI inflation aligned somewhat with expectations, “certain goods particularly vulnerable to tariffs saw larger-than-anticipated price increases, heightening worries about ongoing tariff tensions,” Ng said.
The Mortgage Bankers Association’s Weekly Application Survey, which came out yesterday, reported conforming mortgage rates rose 5 basis points to 6.82% for the period ended July 11.
“Mortgage applications declined 10% last week as higher rates and continued economic uncertainty muted overall demand,” Bob Broeksmit, MBA president and CEO, said in a statement issued this morning. “We expect application activity to continue to seesaw within a narrow range, with movement primarily reflecting the direction of mortgage rates.”
The National Association of Home Builders/Wells Fargo Housing Market Index rose 1 point in July to 33, even as 38% of those surveyed said they cut prices this month, the highest since this index started on a monthly basis in 2022.
“The second half of the year is likely to remain a buyer’s market as interest rates remain elevated,” Foundation Mortgage CEO Marc Halpern, said in a comment on this report. “Listed inventory is taking longer to sell, as potential buyers look for the best deals in their area.”
