Thirty-year fixed-rate mortgages averaged 6.55% over the seven-day period ending July 16, marking a second consecutive week of increases. It is a troubling sign for mortgage affordability that has steadily weakened since rates briefly dipped below 6% in February.

Newly released Freddie Mac data shows average rates for typical 30-year home loans rose six basis points over the week ending Thursday, pushing rates measurably above the 6.43% level where they began the month.

Though 30-year rates remained below last year’s level of around 6.75%, they nevertheless reached their highest levels since late last August. Experts tell Scotsman Guide that mortgage rates are likely to continue rising amid inflation concerns, widening federal spending deficits and the change of leadership at the Federal Reserve.

The 15-year fixed mortgage also moved higher, surpassing year-ago levels of 5.92% after rising 11 basis points over the past seven days to average 5.93% during the second week of July.

Despite the recent pullback in demand, Freddie Mac Chief Economist Sam Khater commented in a press release that improving affordability and rising inventory are signs that conditions for prospective buyers are becoming more favorable.

“Thus the backdrop for prospective homebuyers is modestly improving,” Khater added.

The Mortgage Bankers Association (MBA) reported Wednesday that mortgage application volumes declined 2.7% from the previous week, driven by a 7% drop in purchase demand. Purchase applications also declined from a year earlier as economic uncertainty and affordability barriers continued to hinder homebuyers.

“Mortgage rates increased last week to their highest level since last August, continuing to dampen borrower demand,” noted Bob Broeksmit, president and CEO of the MBA, in a market commentary.

After dipping below 6% in February, 30-year fixed mortgage rates have spent the past eight weeks above 6.5%, according to MBA data, and have remained above 6.4% since late March.

Broeksmit struck an optimistic tone even as housing indicators point to fragmented market conditions that are driving a wedge between buyers and sellers.

“With housing inventory continuing to improve, borrower demand should strengthen once mortgage rates begin to move lower again,” added Broeksmit.