US mortgage rates rose for the first time in 10 weeks, snapping a streak of declines that lowered borrowing costs from nearly two-decade highs.
The average for a 30-year, fixed loan was 6.62%, up from 6.61% last week, Freddie Mac said in a statement Thursday.
Mortgage rates had declined for more than two months, bringing slight relief to buyers. But borrowing costs are still hovering at levels that are more than double where they started in 2022. House hunters also are finding few properties for sale as many owners stay put and hang on to cheaper loans.
Yields on the 10-year Treasury have been rising as traders weigh the Federal Reserve’s path. Recent economic data showed that US companies ramped up hiring in December, raising questions about how deeply and when the central bank can start cutting rates.
“Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, we expect mortgage rates will continue to drift downward as the year unfolds,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
There are a few signs that the gridlock in the housing market may start to ease slightly. Active listings in the four weeks through Dec. 31 posted the smallest drop since June, according to Redfin Corp.
To see a meaningful difference in inventory, a deeper decline in rates may be needed, according to Hannah Jones, Realtor.com senior economic research analyst.
“The typical outstanding mortgage has a rate of less than 4%, more than 2.5 percentage points below today’s rate,” Jones said. “This gap is likely to keep many sellers on the sidelines, waiting for mortgage rates to come down further.”
This article was provided by Bloomberg News.