Mortgage rates have risen slightly this week, further compounding the ongoing housing affordability crisis and dampening homebuyer demand. According to Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, the average rate on the benchmark 30-year fixed mortgage increased to 6.82% from 6.79% last week, while the average rate on the 15-year fixed mortgage dipped slightly to 6.06% from 6.11%.

"Since the start of 2024, the 30-year fixed-rate mortgage has not reached seven percent but has not dropped below 6.6 percent either," said Sam Khater, Freddie Mac's chief economist. "While incoming economic signals indicate lower rates of inflation, we do not expect rates will decrease meaningfully in the near-term. On the plus side, inventory is improving somewhat, which should help temper home price growth."

The persistent combination of elevated mortgage rates and record-high home prices has left the housing market stalled for months, with many would-be buyers priced out of the market and potential sellers unwilling or unable to move due to the affordability crisis. The Mortgage Bankers Association reported Wednesday that purchase applications have fallen for three consecutive weeks, putting a damper on the typically busy spring season.

According to Mortgage News Daily, the average rate for a 30-year loan inched past 7% this week, settling at 7.07% on Wednesday. This rise in mortgage rates has cast further doubt on the likelihood of meaningful rate cuts happening soon for homebuyers. As affordability challenges worsen and consumer optimism declines, waiting for loan rates to decline has become the top reason buyers cite for not actively searching for a home.

"Elevated mortgage rates have been a persistent market challenge, holding back first-time homebuyers and repeat homebuyers alike, albeit for different reasons," said Danielle Hale, chief economist at Freddie Mac. "In order for rates to decline meaningfully and sustainably, inflation needs to be convincingly on a path to the Fed's 2% target."

Homebuyer affordability continued to decline in February, with the US median mortgage payment increasing 2% monthly and 6% annually to nearly $2,200, according to the Mortgage Bankers Association (MBA). The volume of home-purchase applications remained unchanged this week and dropped 13% compared to the same week one year ago, indicating that rising mortgage payments across the US have considerably cooled buyers' demand.

"Challenging affordability conditions and low housing supply are keeping some prospective homebuyers on the sidelines this spring," Edward Seiler, MBA's associate vice president, said. "The eventual, expected decline in rates in the coming months will hopefully spur new activity in the housing market."

However, expectations of a rate decline have been waning. Investors are now betting the Fed will cut rates by less than a percentage point instead of the 1.5% forecasted at the beginning of 2024. Despite this market shift, Fed chairman Jay Powell recently assured the public that inflation is easing and the Central Bank is still expected to cut rates at "some point" this year.'s February 2024 Rental Report found that it is now more affordable to rent than to buy a home in all 50 states, further underscoring the severity of the housing affordability crisis. As many potential sellers remain locked in at lower rates, with 90% of homeowners unwilling or unable to move, the housing market continues to face significant challenges.