Mortgage rates rise again to highest level since February

Mortgage rates rose for the third consecutive week, and are now at their highest level since the start of February, the Freddie Mac Primary Mortgage Market Survey reported.

The 30-year fixed-rate mortgage averaged 6.89% on May 29, up 3 basis points from last week when it was 6.86%, but below one year ago at this time, at 7.03%.

Meanwhile, the 15-year FRM averaged 6.03% versus 6.01% on May 22 and 6.36% on May 30, 2024.

"While the movement isn't drastic, it adds to the growing sense that higher borrowing costs may be sticking around longer than many hoped," Samir Dedhia, CEO of One Real Mortgage, said in a comment..

Other indicators diverged, including the benchmark 10-year Treasury yield which backed off of recent peaks.

The 10-year Treasury, which closed near 4.6% on May 21, was at 4.45% at 11 a.m. on May 29.

What drove mortgage rates this week

"Mortgage rates stabilized over the last few days, but at higher levels," said Kara Ng, senior economist at Zillow Home Loans in a Wednesday evening statement.

"Bond yields — and the mortgage rates that tend to follow them — remain elevated, thanks to ongoing concerns over budget deficits and tariffs," Ng said. "Despite the upward pressure over recent weeks, mortgage rates are still lower than they were a year ago."

Dedhia agreed with Ng's comments about deficits and tariffs impacting Treasury prices. "With uncertainty around how these policies will affect the broader economy, investors are pushing yields on Treasury bonds higher, and mortgage rates are following suit. Without a clear signal from the Fed or a shift in inflation data, rates could remain volatile in the weeks ahead."

What other rate trackers are reporting

Zillow's rate tracker had the 30-year FRM at 7.08% at that time, unchanged from the previous week's average but up 3 basis points on the day.

On the other hand, Optimal Blue had the conforming 30-year FRM at 6.874% as of May 28, down from 6.925% seven days earlier.

Lender Price data posted on the National Mortgage News website found the 30-year back under 7%, at 6.982%, compared with 7.015% one week earlier.

The Mortgage Bankers Association's Weekly Application Survey also increased last week to move near 7%, with the conforming 30-year FRM at 6.98%.

"Mortgage rates increased for the third straight week, pushed higher by continuing volatility in the financial markets," Bob Broeksmit, MBA president and CEO said in a Thursday morning statement. These higher mortgage rates dampened borrower demand,,,despite the weaker activity, the purchase market is on more solid footing than it was a year ago, with applications up 18%."

Freddie Mac Chief Economist Sam Khater had a helpful hint for consumers: "Aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes."

How Pres. Trump's GSE post affected rates

In a May 28 commentary, the primary-secondary spread tightened to about 150 basis points following social media posts from Pres. Trump stating the government guarantee for agency mortgage-backed securities would remain when Fannie Mae and Freddie Mac are privatized, wrote Eric Hagen, an analyst with BTIG.

"We've treated the guarantee as being necessary for supporting both market conditions and value in the Enterprises, but hearing it reiterated still helps trim some risk of a policy miscommunication error which sends MBS spreads and mortgage rates higher as we get closer to an IPO," Hagen said.