Mortgage rates tick up but still chilling near a 3-year low

With input from ABC News, AP, and CBS News.

Mortgage rates nudged higher for the second straight week – but don’t panic: they’re still sitting just above the lowest levels we’ve seen in more than three years.

The headline from Freddie Mac: the average 30-year fixed mortgage rose to 6.10% this week, up from 6.09% last week. The 15-year fixed – the favorite for people refinancing – inched up to 5.49% from 5.44%. For perspective, a year ago the 30-year averaged 6.95% and the 15-year was 6.12%. So we’re better off than a year ago, even if things nudged up a touch this week.

Why the little move? A few forces are at work. Mortgage rates don’t just come from the Fed – they mostly track the 10-year Treasury yield, which was about 4.24% midday Thursday. The bond market’s mood, fed by inflation expectations, geopolitics and the Fed’s path, tends to set mortgage pricing. The Fed paused its recent streak of rate cuts this week after cutting three times late last year; that pause, plus some bumps in the bond market tied to global tensions, helped nudge mortgage rates slightly higher.

The uptick is small, but it’s enough to change behavior at the margins. Mortgage applications fell: the Mortgage Bankers Association reported an 8.5% drop in total applications last week. Refi requests were hit hardest – down 16%, though they still made up 56.2% of all loan activity. Purchase-loan applications slipped 0.4%.

Home shoppers, take note: even small rate moves influence monthly payments and affordability. Still, most homeowners aren’t sweating this week’s bumps – roughly 69% of mortgage-holders have a fixed rate at 5% or below, and just over half are sitting at rates 4% or lower, per Realtor.com. That means a great many owners aren’t likely to refinance unless rates fall significantly.

The US housing market has been stuck in low gear since mortgage rates shot up from the pandemic-era rock-bottoms in 2022. Between still-expensive homes, tight inventory and higher borrowing costs, sales of previously owned homes are hovering near three-decade lows. That said, the fall in rates late last summer did spark some activity – existing-home sales jumped 5.1% in December – so lower rates clearly help.

Most forecasters expect rates to drift down further over the year, but not back to the 3% range any time soon. The consensus? The 30-year average will probably stay above 6% for most scenarios this year. Translation: buyers may see better deals than late 2025, but big relief probably isn’t around the corner.

A useful take from Jiayi Xu, economist at Realtor.com:

“While slightly better rates have supported modest increases in sales and helped temper affordability pressures, the recovery is expected to be slow and uneven until rates move significantly lower and inventory expands further.”

In short – lower rates help, but they’re not a cure-all when there’s just not enough homes for sale.

What to do now

• If you’re shopping: don’t assume rates will drop a lot in the next few weeks. Lock options and shop lenders – small differences in fees and points matter.
• If you’re refinancing: compare the math carefully. If your current rate is under 5%, a refi might not make sense unless rates fall a lot more.
• If you’re just watching: keep tabs on the 10-year Treasury yield and Fed commentary — those are the real signal drivers.

Rates inched up, but we’re still near a multi-year trough compared with last year’s levels. The bigger story remains whether the Fed loosens policy further, how bonds react to global events, and whether home supply finally grows – all of which will determine if mortgage rates resume a friendly slide or drift higher from here.