Mortgage rates continued their upward trajectory this week, climbing for a month straight while further pushing down demand in the stalled 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 6.54% from last week's reading of 6.44%. The average rate on a 30-year loan was 7.79% a year ago.
"The continued strength in the economy drove mortgage rates higher once again this week," said Sam Khater, Freddie Mac’s chief economist. "Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy."
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.
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The average rate on the 15-year fixed mortgage also rose to 5.71% from 5.63% last week. One year ago, the rate on the 15-year fixed note averaged 7.03%.
