"Although 30-year mortgage rates are about three-fourths of a percentage point higher than they were last year, it's good to keep in mind that rates have dropped from the high of 6.80 percent reached just eight weeks ago," said Frank Nothaft, Freddie Mac vice president and chief economist. "And with short-term interest rate increases seemingly on hold, for a while at least, interest rates over all should not experience any big shifts in either direction."

"The risk to our forecast of relatively stable mortgage rates is that inflation will unexpectedly heat up, causing bond markets to raise their expectations that the Fed will intervene by raising short-term rates. In that case, mortgage rates will again start to rise."

Edwina Baniqued