In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgage averaged 6.32 per cent, up from last week when it averaged 6.12 percent. A year ago, the average was just 3.92 per cent.
Freddie Mac put the rise down to sticky inflationary pressures and the effect on the housing market.
Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates moved up for the second consecutive week.
“The economy is showing signs of resilience, mainly due to consumer spending, and rates are increasing. Overall, housing costs are also increasing and therefore impacting inflation, which continues to persist.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.51 per cent, up from last week when it averaged 5.25 per cent. A year ago at this time, the average was 3.15 percent.
Applications take a tumble
A separate weekly survey from the Mortgage Bankers Association (MBA) found that 30-year rates had also risen, along with their 15-year equivalents.
The MBA reported that the interest rate for 30-year fixed rate mortgages rose to 6.39 per cent from 6.18 per cent a week earlier, while the average rate for 15-year fixed rate mortgages grew to 5.85 per cent from 5.64 per cent a week ago.
Joel Kan, MBA’s vice president and deputy chief economist said: “Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.
“After five straight weeks of decreases, the 30-year fixed rate increased by 21 basis points to 6.39 per cent.
“Mortgage applications decreased for the second time in three weeks because of these higher rates. Refinance borrowers remain on the sidelines as current rates provide little financial incentive to act.”
