The average 30-year fixed mortgage rate rose to 6.71%, up from 6.66% last week.
The 15-year fixed rate increased to 6.04%, while both rates remained higher than a year ago.
Freddie Mac said purchase demand has remained relatively stable as buyers adjust to changing market conditions.
Mortgage rates moved higher again this week, increasing the cost of financing a home as the fall housing market gets underway.
The average rate on a 30-year fixed mortgage rose to 6.71% as of Sept. 3, according to Freddie Mac’s latest Primary Mortgage Market Survey. That was up five basis points from 6.66% last week.
A year ago, the 30-year rate averaged 6.50%.
The average 15-year fixed mortgage rate increased to 6.04%, compared with 5.98% last week and 5.60% during the same week last year.
“Purchase demand has remained relatively stable, indicating steady interest from buyers adapting to evolving market conditions,” Freddie Mac said.
While this week’s increase was relatively small, even modest rate changes can affect monthly payments and the maximum price buyers can afford.
For example, a buyer borrowing $320,000 with a 30-year fixed mortgage would pay approximately $2,067 per month in principal and interest at 6.71%. At last week’s 6.66% rate, the payment would have been about $2,055 — roughly $12 less per month.
Compared with last year’s 6.50% average, the current rate would add approximately $44 to the monthly payment, or more than $15,000 over 30 years if the loan were held for its entire term. Those figures exclude property taxes, homeowners insurance and association fees.
Buyers are adapting, but affordability remains strained
Freddie Mac’s observation that purchase demand remains stable suggests some consumers are no longer waiting for a dramatic decline in rates. Buyers may instead be adjusting their budgets, considering smaller homes or negotiating with sellers for closing-cost assistance or temporary mortgage-rate buydowns.
In a separate report this week, real estate platform Realtor.com reported that lower priced homes are getting fewer views than more expensive homes, suggesting affluent buyers can still afford more expensive financing.
However, for the average buyers higher rates remain a significant obstacle when combined with elevated home prices, insurance premiums and property taxes. A borrower’s actual rate may also differ considerably from Freddie Mac’s national average based on credit score, down payment, loan type, location and lender fees.
What to do
Consumers shopping for a home should request loan estimates from several lenders on the same day. Comparing both the interest rate and annual percentage rate, or APR, can reveal differences in points and other borrowing costs.
Buyers should also consider whether paying discount points makes financial sense. Buying points can reduce the mortgage rate, but it may take several years of lower payments to recover the upfront expense.
Current homeowners are unlikely to benefit from refinancing unless they have a mortgage rate significantly above today’s levels or want to change their loan term. Refinancing also comes with closing costs, so homeowners should calculate how long it would take for the monthly savings to offset those expenses.
Freddie Mac’s survey reflects conventional, conforming home-purchase applications submitted by thousands of borrowers nationwide. It is a weekly average rather than a rate guaranteed to every applicant.