By Amina Niasse
NEW YORK (Reuters) - Mortgage rates edged higher for a second week, a survey released on Thursday showed, but they remain near the lowest levels since early last summer, which has contributed to a rebound in home loan demand in the new year.
The average 30-year fixed-rate mortgage rate ticked up slightly to 6.66% on Thursday from 6.62% the week prior, according to a report from Freddie Mac.
“Mortgage rates have not moved materially over the last three weeks and remain in the mid-six percent range, which has marginally increased homebuyer demand,” said Sam Khater, chief economist at Freddie Mac. "Even this slight uptick in demand, combined with inventory that remains tight, continues to cause prices to rise faster than incomes, meaning affordability remains a major headwind for buyers."
Mortgage rates began softening during 2023’s fourth quarter on the back of a rallying bond market. After the Federal Reserve held its policy benchmark interest rate unchanged for three straight meetings, yields on mortgage-backed securities fell, and the average 30-year fixed-rate mortgage has eased from rates nearing 8% in October.
Rates on the most common type of home loan rose to two-decade highs last year following the Fed’s rate hike cycle, launched in 2022. High interest rates have limited affordability for prospective buyers and stoked an inventory shortage in the housing market as homeowners locked into cheaper rates were discouraged from selling.