Mortgage rates rise to 1-year high

Key Points:

• Mortgage rates increased to the highest level in a year, with the average 30-year fixed mortgage rate rising to 6.66% from 6.58% last week, according to Freddie Mac's latest survey.
• The average rate on a 15-year fixed mortgage also rose to 6.04% from 5.96% the previous week, influenced by geopolitical tensions in Iran and the Federal Reserve's decision to keep interest rates steady.
• Although the Federal Reserve left the benchmark federal funds rate unchanged at 3.5% to 3.75%, mortgage rates closely track the 10-year Treasury yield, which remained around 4.66%.
• Fed policymakers signaled a higher likelihood of future rate hikes rather than cuts, limiting near-term relief for mortgage rates, with oil prices and Middle East tensions playing a significant role in inflation and borrowing costs.
• The housing market benefits from increased inventory, but higher borrowing costs continue to impact first-time buyers the most, while low-rate homeowners remain reluctant to sell, keeping inventory constrained.