Last week witnessed a slight uptick in mortgage rates, leaving prospective homebuyers with little respite during a seasonally slower period for the housing market. According to Freddie Mac data, the average 30-year fixed mortgage rate reached 6.84% in the week through Wednesday, as opposed to 6.78% the previous week. Simultaneously, the average 15-year rate increased from 5.99% to 6.02%. These rates have been gradually moving back towards 7% as 10-year Treasury yields, which closely influence mortgage rates, have remained around 4.4% in the weeks following the election.

Chief Economist's Perspective

Sam Khater, Freddie Mac's chief economist, stated in a statement that heading into the holidays, purchase demand remains sluggish. Although for-sale inventory is seeing a modest increase, the elevated interest rate environment has led to a softening in new construction. This indicates that the higher rates are having a significant impact on the housing market, affecting both purchase demand and new construction activities.Even with the persistent higher rates, mortgage application volumes are showing a slight improvement. The Mortgage Bankers Association (MBA) reported that applications to purchase a home were up 2% through Nov. 15 compared to the same week a year ago. Additionally, refinancing applications also rose by 2%, driven by an increase in VA loans. This shows that despite the overall higher rates, there is still some activity in the mortgage market.The existing home sales data released on Thursday provided some positive news. It showed the first year-over-year gain since 2021, likely aided by the lower mortgage rates seen earlier in the fall. October's seasonally adjusted annual rate of 3.96 million homes was 2.9% higher than a year earlier. This indicates that lower mortgage rates can have a positive impact on existing home sales.The direction of mortgage rates will play a crucial role in affecting home sales in the coming months. National Association of Realtors Chief Economist Lawrence Yun stated in a statement that the worst of the downturn in home sales may be over, with increasing inventory leading to more transactions. He also mentioned that additional job gains and continued economic growth seem assured, resulting in growing housing demand. This suggests that a combination of factors, including mortgage rates and economic conditions, will determine the future of the housing market.Claire Boston, a senior reporter for Yahoo Finance, specializes in covering housing, mortgages, and home insurance. Her reports provide valuable insights into the various aspects of the housing market and its related issues.In conclusion, the rising mortgage rates and their impact on the housing market are complex and multifaceted. While higher rates have led to a slowdown in some areas, there are also signs of improvement and potential for growth. The future of the housing market will depend on various factors, including mortgage rates, economic conditions, and consumer behavior.