the normallybusy spring home buying season is in its early days—but what lies in the coming months will look much different than last spring a raft of recent housing data gives investors clues on what could happen next but the number to watch is still mortgage rates housing market data released this month showed hopeful signs of buyer demand picking up ahead of the normally busy spring season then mortgage rates rose first builder confidence measured by the national association of home builders increased for the second month in a row next the national association of realtors said seasonallyadjusted existinghome sales in january fell by 07—a smaller decline than recent drops that “may be suggesting that the home sales are bottoming out” lawrence yun the trade group’s chief economist said on a tuesday conference call finally the census bureau said the seasonallyadjusted annual rate of new home sales a measure of contract signings increased in january by 72 such data would paint an optimistic picture of the housing market gearing up for the spring home buying season—if not for recent gains in mortgage rates which weekly data show may have weighed on home buyers in recent weeks the average rate on a fixed 30year mortgage this week was 65 according to freddie mac  representing an increase of 041 percentage point from the first reading in february mortgage rates this month have gained on the back of strongerthanexpected economic data “interest rates are repricing to account for the stronger than expected growth tight labor market and the threat of sticky inflation” sam khater freddie mac’s chief economist said in a wednesday statement there’s reason to pay attention—even as indicators of contract signings such as friday’s new home sales report show gains “even though new home sales edged higher in january the recent uptick in mortgage rates would imply continued weakness in the coming months” danushka nanayakkaraskillington the national association of home builders’ assistant vice president for forecasting and analysis said in a friday statement since the covid19 pandemic began nearly three years ago housing market trends have been driven in part by mortgage rates in 2021 a year marked by historicallylow rates buyers purchased 612 million existinghomes the largest yearly total since 2006 according to the national association of realtors in 2022 the pendulum swung back mortgage rates gained through much of the year topping 7 and cooling the housing market existinghome sales dropped more than 20 last year to the lowest annual total since 2014 according to national association of realtors data one early data point shows signs of higher rates weighing on buyer demand the mortgage bankers association’s seasonallyadjusted measurement of home purchase loan applications dropped 18 during the week ending feb 17 the most recent time frame for which the data is available it was the metric’s second decline in a row and the sharpest weekoverweek drop since october 2015 the drop came as mortgage rates rose during a typically busy week as the spring home buying season begins “given the patterns that we’ve seen recently there’s certainly good evidence that purchase activity is still extremely sensitive to rate movements” said joel kan the trade group’s deputy chief economist who said seasonal adjustment intensified the downward drop on an unadjusted basis the metric dropped 4 according to the trade group while the association expects demand to pick up in the middle of the spring “how rates behave over the next month or so really is going to determine how much of that pickup we’re going to get” kan says investors will have to wait to see how friday’s core pce reading impacts weekly rates and buyer demand—freddie mac’s mortgage rate gauge is released on thursdays while the mortgage bankers association releases their purchase loan application gauge the following wednesday—but early signs point to higher rates rocket mortgage a large home loan originator quoted interest rates on 30year fixedrate loans at 699 on friday afternoon while mortgage news daily’s survey pegged friday’s rate at 688 higher rates don’t necessarily mean buyers will flee the market luxury builder toll brothers ticker tol saw deposits increase even as mortgage rates rose ceo douglas yearley said on wednesday on the company’s firstquarter earnings conference call whatever the impact it will take time for the increase in rates to reflect in monthly data one of the remaining housing data releases for this month the national association of realtors’ pending home sales index for january is expected to show its second increase in a row after several months of declines according to factset