Mortgage Rates Edge Upwards, But Consumer Confidence Remains High

After tumbling 18 basis points last week, Freddie Mac said, the 30-year fixed-rate mortgage rose slightly to 6.81%, up from last week's average of 6.78%. 

The 15-year fixed-rate mortgage followed suit, inching upwards to 6.11% from the previous week's 6.06%. These figures notably stand in stark contrast to the same period a year ago, where the 30-year and 15-year FRM rates averaged at 5.30% and 4.58% respectively.

Freddie Mac Chief Economist Sam Khater noted that the slight increase comes after a considerable decline in rates the previous week. "Higher interest rates continue to suppress activity in sectors sensitive to interest rates, such as housing," Khater explained.

However, despite the rising mortgage rates, consumer confidence remains robust. According to the Conference Board's Consumer Confidence Index for July 2023, U.S. consumer confidence has soared to a two-year high. Khater suggests this could lead to increased spending, potentially drawing more consumers into the housing market.

The Primary Mortgage Market Survey (PMMS) by Freddie Mac is designed to monitor conventional, conforming, fully amortizing home purchase loans for borrowers who make a 20 percent down payment and have excellent credit. As mortgage rates continue to fluctuate, potential homebuyers and investors are encouraged to stay informed and assess their options carefully.