Data climbing upwards with percentage sign and house below
Illustration by Lanette Behiry/Real Estate News

Mortgage rates inch upward but remain relatively stable 

The 30-year fixed-rate mortgage has teetered between about 6.3-6.4% in recent weeks, a possible sign that rates are leveling out.

May 18, 2023
2 minutes

Key points:

  • Consumers appear to be adjusting to the current range of mortgage rates, but low inventory remains a blocker.
  • Applications for mortgage loans have been sluggish, falling from last week.
  • Rates are expected to climb if the federal government fails to reach a speedy agreement on the debt ceiling.

Despite persistent economic uncertainty and the threat of default by the federal government, mortgage interest rates have remained surprisingly tranquil in recent weeks.

The 30-year fixed rate averaged 6.39% this week, according to the latest Freddie Mac survey. While up slightly from 6.35% last week, the rate has mostly stayed within the 6.3-6.4% range for the past several weeks.

Sam Khater, Freddie Mac's chief economist, attributed this stability to strong economic crosscurrents balancing each other out, like a healthy jobs report offsetting trouble in the banking sector. It's also led to stabilizing home prices.

"This indicates that while affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership," Khater said.

Hannah Jones,'s economic data analyst, said that buyer demand is still sensitive to the ebb and flow of mortgage rates, but near-peak home prices and elevated inflation is keeping many would-be buyers on the sidelines.

"Constrained buyers and reluctant sellers mean the spring market hasn't picked up as much momentum as in years past, but each improvement in affordability is met with an increase in buyer activity," Jones said. "However, increased buyer activity has not been met with increased seller activity, and in many markets, buyers are competing for the few fresh listings available."

Buyers may be interested, but "remain wary of this rate volatility," said Joel Kan, deputy chief economist for the Mortgage Bankers Association. The MBA noted that rising mortgage rates may be putting a damper on mortgage applications. Applications were down 5.7% in the past week and down 26% compared to a year ago.

Uncertainty around broader aspects of the economy, such as the debt limit standstill at the federal level, means the outlook for mortgage rates remains hazy, said Lisa Sturtevant, chief economist for Bright MLS.

"There are various factors pushing and pulling rates in different directions. A key factor to watch is whether the next inflation report shows improvement," Sturtevant said. "But also important is whether Congress and the President can come to a deal on the debt limit as time is quickly running out. The longer the negotiations go on, the more likely we will see mortgage rates continue to rise."

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