Freddie Mac reported an increase in the average mortgage rate yesterday in their weekly mortgage market survey. The thirty year fixed rate averaged 6.36% at half a point, up from 6.31% the week previous. Meantime, the 15-year fixed rate averaged 5.89 percent at 0.6 point, up from last week’s average of 5.85 percent.

“According to our most recent economic outlook, we expect rates to continue to rise gradually over the next 12 or so months. Because the housing sector is so sensitive to fluctuations in interest rates, this will have the effect of returning the housing sector to a more normal pace of activity, by historical standards.”

Watching the Sacramento market, I’m already seeing signs of a slow down from last year in many areas, but time will tell how quickly this slowing translates into any change in prices. I expect sellers’ expectations to be a trailing indicator.

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