30-Year Fixed Mortgage Rate Climbs to 6.66%, Highest in a Year

Freddie Mac's Primary Mortgage Market Survey released Thursday showed the average rate on a 30-year fixed mortgage increased to 6.66%, up from 6.58% the previous week and the highest level in a year. The 15-year fixed rate also rose, reaching 6.04% from 5.96%.

Sam Khater, Freddie Mac's chief economist, said the housing market is benefiting from more inventory, which gives buyers more options and helps sustain activity as rates fluctuate.

Mortgage rates are influenced by several factors, including Federal Reserve policy and geopolitical events. The eight-basis-point rise coincided with higher yields after the conflict in Iran and the Fed's decision to keep its benchmark rate unchanged at 3.5%-3.75% following a 9-3 vote.

Although the Fed does not set mortgage rates directly, they tend to follow the 10-year Treasury yield, which was around 4.66% on Thursday.

Realtor.com senior economist Anthony Smith noted that with the Fed likely to raise rates rather than cut them, short-term relief appears unlikely, and that de-escalation of the Iran conflict could help lower rates.

The Federal Open Market Committee said economic activity continues to expand despite uncertainty tied in part to Middle-East tensions. Smith added that first-time buyers with larger loans are most exposed to rising borrowing costs, while homeowners with sub-4% rates have little incentive to sell, limiting inventory.