Mortgage rates were up slightly this week but stayed below 7% for a 17th consecutive week.
The Federal Home Loan Mortgage Corporation, better known as Freddie Mac, reported Thursday the weekly average 30-year fixed rate mortgage was at 6.81%, a 0.05 percentage point increase from the previous week.
“Stable mortgage rates coupled with moderately rising inventory are attracting homebuyers into the market, with purchase application activity up 18% from last year,” according to a Freddie Mac site post that noted how long the average rate has been below the 7% threshold.
But Redfin, the nation’s largest brokerage website, painted a different picture of the market.
“Economic Jitters, High Costs Stifle Spring Home Sales,” read the headline on an analysis also posted Thursday that noted pending home sales in the U.S. fell 3.4% year over year during the four weeks that ended May 11. That’s the lowest level for that time period since 2020.
The slow start to the traditionally busy spring homebuying season, seen in Utah as well as throughout the country, is blamed on rising home prices and mortgage rates that are still seen as high.
Another factor cited by buyers is continued concern about the future of the U.S. economy. President Donald Trump’s on-again, off again tariffs and other policies have roiled financial markets around the world.
“There’s a lot of doubt and hesitation among house hunters,” Meme Loggins, a real estate agent based in Portland, Oregon, who has sold 321 homes, told Redfin.
“People are starting their home search, then backing out because they either talked to their lender and realized how high their monthly payments would be, or they’re feeling jittery about tariffs, a potential recession, and/or the possibility of getting laid off,” she said.
The “smart strategy” she’s seeing among buyers right now? “They’re looking for condos or small houses to lower their monthly payments and simplify their life,” Loggins said. “And a smart strategy for sellers is offering mortgage-rate buy downs to pique buyers’ interest.”
This week, the stock market surged on news that the U.S. is at least temporarily reducing tariffs on China. Chen Zhao, Redfin’s head of economic research, said while that may reduce the risk of a recession, mortgage rates aren’t dropping.
“It’s a catch-22 for homebuyers,” Zhao said in the post. “Mortgage rates are unlikely to fall unless all of the new tariffs are eliminated, or if the country falls into a fairly severe recession, which would cut housing budgets for many Americans.”
Mortgage News Daily’s Matthew Graham pointed out Wednesday that “it’s been tough sledding for bonds and the rate market. Almost every day in the month of May has been a bad one. Even if the size of the rate increases have been reasonably small, they’re starting to add up.”
Thursday, Mortgage News Daily’s 30-year fixed-rate mortgage index was at 6.96%.
