<p>Mortgage rates were virtually unchanged this week, but signs indicate that the housing market is constrained by higher prices and low inventory. </p>
<p>Mortgage buyer Freddie Mac reported Thursday that the benchmark 30-year loan rate was 3.18% this week, up from 3.17% last week. A year ago, the rate was 3.33%.</p>
<p>The 15-year loan, popular among those who refinance their mortgages, was unchanged from last week at 2.45%. A year ago it was 2.82%.</p>
<p>“Although mortgage rates remain low, we are beginning to see a pullback by those looking to enter the housing market,” said Sam Khater, Freddie Mac’s chief economist. “In fact, homebuyer demand has gone from 25% above pre-COVID levels at the start of the year, when mortgage rates hit record lows, to 8% above pre-COVID levels today.”</p>
<p>While mortgage rates remain historically low, strong demand for homes has led to low inventory and higher prices. </p>
<p>Wednesday, the National Association of Realtors’ index of <a href="https://apnews.com/article/coronavirus-pandemic-home-sales-economy-0e9ffee36e5ffc660354304265779895">pending home sales tumbled 10.6% </a> to 110.3 in February, its lowest level since May of last year. Combined with a 2.4% dip in January, contract signings are now 0.5% behind where they were last year after eight straight months of year-over-year gains.</p>
<p>In January, <a href="https://apnews.com/article/financial-markets-home-prices-prices-coronavirus-pandemic-5f01185ee13a69234972f13179896a2f"> U.S. home prices increased at the fastest pace in seven years,</a> according to the S&P CoreLogic Case-Shiller 20-city home price index. The pandemic has fueled demand for single-family houses even as the supply for such homes shrinks. </p>
<p>Economists have expected modest increases in home-loan rates this year, though they likely will remain low while the Federal Reserve keeps interest rates near zero until the economy recovers from the coronavirus pandemic.</p>
