In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.39 per cent, down from last week when it stood at 6.43 percent. A year ago, the average was 5.27 per cent.
Although there was a decrease after a series of rate rises in recent weeks, experts at Freddie Mac noted that, just as in the UK, a lack of supply was affecting affordability.
Sam Khater, Freddie Mac’s chief economist, said: “This week, mortgage rates inched down slightly amid recent volatility in the banking sector and commentary from the Federal Reserve on its policy outlook.
“Spring is typically the busiest season for the residential housing market and, despite rates hovering in the mid-six percent range, this year is no different. Interested homebuyers are acclimating to the current rate environment, but the lack of inventory remains a primary obstacle to affordability.”
Meanwhile, the 15-year fixed rate mortgage rose slightly, averaging 5.76 per cent, up from last week when it averaged 5.71 per cent. A year ago the average was just 4.52 per cent.
Applications rise but way off last year’s total
A separate weekly survey from the Mortgage Bankers Association (MBA) also saw rates falling, but only marginally.
The MBA reported that the interest rate for 30-year fixed rate mortgages increased to 6.50 per cent from 6.55 per cent a week earlier, while, contrary to the Freddie Mac survey, the average rate for the 15-year equivalents also fell to 6.01 per cent from 6.03 per cent a week ago.
However, despite the drop in rates, applications were down by 1.2 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage applications decreased last week, despite rates declining slightly for the first time in three weeks.
“Elevated rates continue to both impact homebuyer affordability and weaken demand for refinancing. Home purchase activity has been very sensitive to rates and local market trends, including the very low supply of existing-home inventory. However, newly constructed homes account for a growing share of inventory, giving more options for prospective buyers.”
