Mortgage rates tick slightly higher but remain near 6.5%

• The 30-year fixed mortgage rate averaged 6.49%, up from 6.43% last week but down from 6.72% a year ago, while 15-year rates rose to 5.82%
• Home price growth is forecast to slow to 1.2% in 2026, below the current inflation rate, meaning real home prices would effectively decline
• Mortgage rates are expected to hold steady at 6.3% as inflation concerns caused by the Iran war have reduced prospects for interest rate cuts

Summary

Mortgage Rate Movement:

Mortgage rates edged higher this week but remain relatively stable near the 6.5% threshold. The 30-year fixed-rate mortgage averaged 6.49%, up from 6.43% the previous week, according to Freddie Mac's Primary Mortgage Market Survey released Thursday. This compares to 6.72% one year ago. The 15-year fixed-rate mortgage rose to 5.82% from 5.79%, still below last year's 5.86%.

Market Context:

Freddie Mac Chief Economist Sam Khater noted that while rates haven't changed significantly recently, economic growth and housing affordability continue improving for prospective homebuyers. Mortgage rates track the 10-year Treasury yield, which hovered around 4.5% Thursday, rather than directly following Federal Reserve decisions.

Housing Market Outlook:

Realtor.com's midyear 2026 forecast projects home price growth will slow to 1.2% this year—below inflation rates, meaning real prices would effectively decline. This marks a deceleration from earlier predictions. Senior Economist Danielle Hale stated the market is "inching forward" as sellers adjust expectations, price growth cools, and buyers gain negotiating leverage.

Future Projections:

Mortgage rates are expected to hold steady at approximately 6.3% through year-end. Earlier hopes for rate cuts that could have reduced mortgage costs were undercut by resurgent inflation attributed to the Iran war. The housing market showed stability rather than momentum in the first half of 2026, with improvements anticipated in the second half as more buyers and sellers find agreeable terms.