Up or down? What’s happening with mortgage rates

It looked like another week of good news for mortgage rates.

After all, the weekly average mortgage rate in the U.S. dropped for a fourth straight week Thursday, to 7.11%, for a 30-year, fixed-rate loan, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.

Not so fast. The daily index at Mortgage News Daily jumped 0.32% over just three days to 7.5% Friday, all but erasing five weeks of gains. “Mortgage Rates Definitely Aren’t Lower This Week!” a headline on a Thursday post declared, pointing out the weekly average can be outdated.

NerdWallet summed up the situation this way: “Let’s just say that mortgage rates are looking appropriately scary for Friday the 13th.” The online personal finance company posted that rates provided by Zillow just made “kind of a big jump,” from 7.09% Thursday to a 7.25% rate Friday.

Homes.com noted Freddie Mac’s weekly average in a Thursday post, but said daily mortgage rate averages “show a more volatile picture of the market,” rising sharply this week after the release of new inflation data showed prices increased more than expected last month.

The suggestion by economists that “higher rates are likely here to stay” is being reinforced by the market’s response to that and other factors, Homes.com concluded, quoting a recent social media post by Sam Williamson, senior economist at First American Financial Corp.

“For home buyers, hotter inflation is likely to prolong the wait for meaningful mortgage-rate relief,” Williamson wrote Tuesday on LinkedIn. “Stronger job growth may give some households the income to move, but elevated borrowing costs raise the hurdle for all borrowers.”

In February, mortgage rates had slipped below 6% for the first time since 2022 but soon started climbing after the U.S. and Israel launched a war against Iran. The ongoing conflict has fueled economic uncertainty that’s led to higher yields on the long-term bonds tied to mortgage rates.

There’s even been speculation that mortgage rates could reach 8% before the end of the year. In October, Freddie Mac’s weekly average hit 7.4%, the highest level in some three years before starting to decline. Still, a year ago, the mortgage giant’s weekly average was at 6.24%.