A difference of about $27 per month in payments could be making some prospective home buyers jittery after seeing headlines that mortgage rates are rising again. The 30-year fixed-rate mortgage averaged 6.11% this week, according to Freddie Mac, up from 5.98% two weeks ago, when rates briefly dipped below 6% for the first time since 2022.
“While the increase from 5.98% to 6.11% was a relatively strong move, it was largely expected given recent geopolitical developments and the upward trend in the 10-year Treasury yield, which mortgage rates tend to follow,” says Nadia Evangelou, principal economist and director of real estate research at the National Association of REALTORS®.
“Geopolitical developments can create short-term volatility in financial markets. Since mortgage rates tend to follow movements in the 10-year Treasury yield, the current shifts in global conditions are expected to bring temporary fluctuations in mortgage rates as well,” she says.
Still, before buyers panic, they may want to keep the numbers in perspective: The difference between a 5.98% rate and this week’s 6.11% rate on a $400,000 home with 20% down amounts to about $27 more per month in a mortgage payment.
Many financial experts say the move above the 6% threshold is more psychological than financial for buyers, even as concerns about rising rates begin to resurface.
Global tensions are creating uncertainty. The Iranian conflict has contributed to recent market swings, pushing gas prices higher and renewing concerns about inflation. Meanwhile, the Federal Reserve is scheduled to meet next week to decide the direction of its short-term benchmark interest rate. While the Fed doesn’t directly set mortgage rates, its policies often influence them.
“Financial markets were volatile last week amid the ongoing turmoil in the Middle East,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a statement. “Borrowers in recent weeks were able to get 30-year conforming rates below 6%, but with the current volatility, longer-term rates have moved up.”
The Difference in Mortgage Payments
How much difference does a slightly higher mortgage rate make?
For a $400,000 home with 20% down, monthly payments would look roughly like this:
- 5.98% rate: $1,914 per month
- 6% rate: $1,919 per month
- 6.11% rate: $1,941 per month
A year ago, when 30-year mortgage rates averaged 6.65%, that same mortgage payment would have been about $2,054 per month—about $113 more each month than today’s average.
Housing Market Show Signs of Improvement
Housing affordability has improved slightly as home prices have moderated, and mortgage rates have fallen from the mid-to-high 6% averages seen a year ago. The shift appears to be helping home sales gain traction heading into spring.
NAR reported this week that existing-home sales rose 1.7% in February compared to January, as housing affordability improved nationwide.
Mortgage applications for home purchases—a gauge of future home sales—also have been increasing. Applications were 11% higher last week compared to a year earlier, according to the Mortgage Bankers Association.
With purchase applications rising, it’s “a welcome sign as buyers enter spring home buying season with rates down more than half a percentage point compared to the same time last year,” says Sam Khater, Freddie Mac’s chief economist.
Mortgage Rate Averages This Week
Freddie Mac reported the following national averages with mortgage rates for the week ending March 12:
- 30-year fixed-rate mortgages: averaged 6.11%, up from last week’s 6% average. A year ago, 30-year rates averaged 6.65%.
- 15-year fixed-rate mortgages: averaged 5.50%, rising from last week’s 5.43% average. A year ago, 15-year rates averaged 5.80%.
