Mortgage rates hold steady despite rise in inflation

Investing.com -- Mortgage rates in the United States remained largely unchanged this week, with the average rate for 30-year fixed loans declining slightly to 6.36% from 6.37% the previous week. A year ago, the rate stood at 6.81%.

The stability in mortgage rates comes as inflation indicators this week pointed toward a likely increase in borrowing costs. Government data released this week showed that inflation accelerated in April, driven by higher gasoline and grocery prices. The inflation data has boosted expectations that the Federal Reserve will raise interest rates.

The housing market showed mixed signals during the key home-selling season. According to Redfin, the median home price rose 2.4% in April, marking the largest annual gain since March 2025. Pending sales reached their highest level since 2023, and active listings increased, indicating that sellers are returning to the market.

However, the peak sales season began slowly. By historical standards, the housing market remains weak, and rate fluctuations may undermine recent momentum as the conflict in the Middle East continues.

At the current 30-year average rate, borrowers with a $1 million loan would pay approximately $6,229 per month, excluding insurance and taxes. This compares to $5,983 in late February when rates briefly dropped below 6%, just before the US-Israeli bombing campaign began.

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