After weeks of holding steady, mortgage rates crept higher this week, closing in on 7% for the 30-year mortgage, according to Freddie Mac.

The average 30-year fixed-rate mortgage was 6.9% for the week ending Feb. 22, according to Freddie Mac's latest Primary Mortgage Market Survey. That's a big jump from the previous week when it averaged 6.77%. A year ago, the 30-year fixed-rate mortgage averaged 6.5%. 

The average rate for a 15-year mortgage was 6.29%, up from 6.12% last week and up from 5.76% last year.

Mortgage rates had stood steadfast in the 6.5% range for weeks as the market awaited an indication of when the Federal Reserve would begin dialing back interest rates. 

While the central bank has said that the plan to reverse interest rate hikes is still in the works, it has been less transparent on the timeline for when those cuts will begin. Recent robust economic data shows that the U.S. economy is holding steady despite the Federal Reserve's restrictive monetary policy.

"Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates," Freddie Mac Chief Economist Sam Khater said. "Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market. The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability."

If you're worried about the state of the economy, you could consider paying down high-interest debt with a personal loan at a lower interest rate. Visit Credible to speak with a personal loan expert and get your questions answered.

NEARLY 89% OF U.S. HOMEOWNERS WITH MORTGAGES HAVE AN INTEREST RATE BELOW 6%: REDFIN

Homebuyers will likely have to wait longer before seeing a meaningful drop in mortgage rates. Minutes from the most recent Federal Open Market Committee (FOMC) meeting revealed that officials who expressed optimism and caution on inflation are in no rush to cut interest rates. FOMC officials noted that no rate cuts would come "until they had gained greater confidence" that inflation was moving to the 2% target rate. 

"Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2%," the minutes said

The Federal Reserve maintained the federal funds rate at a 22-year high of 5.25% to 5.5% but plans to lower rates starting this year. Fed officials have predicted at least three rate cuts this year, with interest rates expected to tick down to 4.6%, according to the central bank's updated economic forecasts in its Summary of Economic Projections (SEP). 

"Even though the FOMC has acknowledged the likelihood of rate cuts in 2024, the post-meeting statement on Wednesday emphasized that policymakers do not want to rush it," Realtor.com Economist Jiayi Xu said in a statement. "In essence, Federal Reserve officials are seeking more concrete evidence of sustained improvement in inflation before making any changes."

If you are looking to take advantage of the current mortgage rates by refinancing your mortgage loan or are ready to shop for the best rate on a new mortgage, consider visiting an online marketplace like Credible to compare rates and get preapproved with multiple lenders at once.

MILLENNIALS ARE DESPERATE TO BUY A HOME, MOST WILLING TO PAY A MORTGAGE RATE ABOVE 7%: SURVEY

Home price gains are another reason why home buyers are struggling in the current market. House prices reached a new peak for the tenth month in a row in January 2024, increasing 0.3% from the previous month and 7.2% from a year ago, according to First American's latest Home Price Index.  

However, the pace of annualized house price appreciation peaked at 7.7% in December, driven by buyers looking to take advantage of lower mortgage rates after nearly hitting 8% the month before. Signs of a cooling housing market could help incentivize buyers and sellers to return to the market.

"In January, the preliminary estimate of annualized appreciation cooled modestly by half a percent and is likely to slow down further in the coming months," First American Chief Economist Mark Fleming said. "Optimism that mortgage rates will fall in 2024 may incent more homeowners to sell, boosting supply and, in turn, improving affordability for buyers. 

"While more supply and improved affordability should cool post-pandemic hot house price appreciation, 2024 may still be the year that house price appreciation doesn't get too cold, but closer to just right," Fleming said.

If you're looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.

THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS

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