In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.50 per cent, up from last week when it averaged 6.32 percent. A year ago, the average was just 3.89 per cent.
Freddie Mac put the rise down to inflationary pressures but noted that there was a variation in rates across lenders which meant buyers could find better rates if they “shopped around”.
Sam Khater, Freddie Mac’s chief economist, said: “The economy continues to show strength, and interest rates are repricing to account for the stronger than expected growth, tight labour market and the threat of sticky inflation.
“Our research shows that rate dispersion increases as mortgage rates trend up. This means homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.76 per cent, up from last week when it averaged 5.51 per cent. A year ago at this time, the average was 3.14 per cent.
Homebuyers ‘back on the sidelines’
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 6.62 per cent from 6.39 per cent a week earlier, while the average rate for the 15-year equivalents grew to 5.98 per cent from 5.85 per cent a week ago.
Joel Kan, MBA’s vice president and deputy chief economist said: “Mortgage rates increased across all loan types last week, with the 30-year fixed rate jumping 23 basis points to 6.62 per cent – the highest rate since November 2022.
“This time of the year is typically when purchase activity ramps up, but over the past two weeks, rates have increased significantly as financial markets digest data on inflation cooling at a slower pace than expected.
“The increase in mortgages rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.”
