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Mortgage interest rates rose for the sixth straight week while purchasing demand continues to decline in a stagnant housing market.
Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30 year fixed mortgage jumped to 6.79% from last week's reading of 6.72%. The average rate on a 30-year loan was 7.50% last year.
A home available for sale in Austin, Texas, is seen on May 22. (Brandon Bell/Getty Images/Getty Images)
“Clearly purchase demand is very sensitive to mortgage rates in the current market environment,” said Sam Khater, Freddie Mac's chief economist. “As soon as interest rates started rising in early October, purchase applications fell and over the past month have fallen 10 percent.”
Many potential buyers and sellers are waiting to see if prices will fall further. Currently, about 80% of mortgage holders have interest rates below 5%, according to a Zillow survey.
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The average interest rate on a 15-year fixed mortgage also rose to 6% from 5.99% last week. One year ago, interest rates on 15-year fixed bonds averaged 6.81%.