Mortgage rates ticked slightly higher this week, but were little changed, mortgage buyer Freddie Mac said on Thursday.
Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage rose to 6.49% from last week's reading of 6.47% and 6.52% the week before last.
The average rate on a 30-year loan was 6.77% at this time a year ago.
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"The average 30-year fixed mortgage rate was little changed this week at 6.49%," said Sam Khater, chief economist at Freddie Mac.
"Rates have remained relatively stable over the last six weeks. Meanwhile, purchase activity eased modestly and eased modestly and refinance activity has continued to pick up recently, reflecting borrowers' responsiveness to current rate levels," Khater added.
The average rate on a 15-year fixed mortgage also moved slightly higher, rising to 5.84% as of Thursday. That's an increase from last week's reading of 5.81%, though it remains below the average rate of 5.89% from a year ago.
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Mortgage rates are affected by several factors, including the Federal Reserve and geopolitics. Although mortgage rates aren't directly affected by the Fed's interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield hovered around 4.4% as of Thursday afternoon.
The latest mortgage data comes a little over a week after the Federal Reserve voted to hold its benchmark interest rate steady at a range of 3.5% to 3.75% amid concerns about stubbornly high inflation that has trended higher due to the Iran war constraining oil supplies.
Fed policymakers voted unanimously to hold rates steady because of the elevated inflation following newly-minted Fed Chair Kevin Warsh's first policy meeting as the central bank's leader. Their economic projections on the so-called "dot plot" showed nine members of the 17-member Federal Open Market Committee projecting a rate hike before the end of this year.
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The Commerce Department on Thursday released the personal consumption expenditures (PCE) index – the Fed's preferred inflation gauge – which showed that headline PCE inflation was up 4.1% from a year ago, while core PCE was 3.4% higher.
Both metrics are well above the Fed's long-run target of 2% inflation, which has diminished the market's expectations for the central bank to cut interest rates this year.
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The CME FedWatch as of Thursday shows that rates remaining at their current levels through the end of the year is the most likely outcome, while it also shows a greater probability of one or more rate hikes this year than a rate cut.