The 30-year average mortgage rate rose one notch in Freddie Mac's latest weekly survey. It was at the level last reached in July 2020, but was below the level a year ago.
The current mortgage rate of 3.05% is slightly higher than last week's 3.02% but is below the weekly average of 3.36% a year ago and is not rising as fast as it was before.
Refinancing has decreased somewhat due to the upward trend in financing costs. However, consumers are still generally interested in borrowing because they want to do so before interest rates get much higher.
"My personal opinion is that as the country recovers, rates will continue to rise this year," said David Battany, executive vice president of capital markets for Guild Mortgage. "Instead of wishing you had yesterday's prices or last week's prices, consider that today's prices are probably better than they will be a month from now."
While refinancing has eased somewhat due to higher interest rates, interest in borrowing for home purchases has been growing, Freddie Mac chief economist Sam Khater said in the government-sponsored company's latest interest rate report.
"Even if interest rates rise slightly, the housing market remains healthy for the start of the home spring season," he said.
Given that the indicative yield on 10-year government bonds fluctuates due to changing market sentiment about inflation, interest rates are unlikely to rise sharply. The 10-year yield started the day at 1.5% and initially rose slightly to 1.54% on Thursday morning.
"While the longer-term path for mortgage rates is almost certainly going up, recent developments may indicate that the rapid upward trend in interest rates may be easing," Zillow economist Matthew Speakman said in a press release.