In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.43 per cent, up from last week when it stood at 6.39 percent. A year ago, the average was 5.10 per cent.
Despite the rise, experts at Freddie Mac noted that a ‘gentle’ decline in inflation coupled with a stabilising housing market could see rates fall for the rest of the year.
Sam Khater, Freddie Mac’s chief economist, said: “The 30-year fixed-rate mortgage increased modestly for the second straight week, but with the rate of inflation decelerating, rates should gently decline over the course of 2023.
“Incoming data suggest the housing market has stabilized from a sales and house price perspective. The prospect of lower mortgage rates for the remainder of the year should be welcome news to borrowers who are looking to purchase a home.”
Indeed, the 15-year fixed rate mortgage has already started dropping, averaging 5.71 per cent, down from last week when it averaged 5.76 per cent. A year ago at this time, the average was just 4.40 per cent.
Applications rise but way off last year’s total
A separate weekly survey from the Mortgage Bankers Association (MBA) also found an upward trajectory for rates.
The MBA reported that the interest rate for 30-year fixed rate mortgages increased to 6.55 per cent from 6.43 per cent a week earlier, while, contrary to the Freddie Mac survey, the average rate for the 15-year equivalents also rose to 6.03 per cent from 5.89 per cent a week ago.
However, despite the increase in rates, applications were still up by 3.7 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Both conventional and government home purchase applications increased last week. However, activity was still nearly 28 per cent below last year’s pace, as high mortgage rates and low supply have slowed the market this year, even as home-price growth has decelerated in many markets across the country.”
