In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.79 per cent, up from last week when it stood at 6.57 per cent. A year ago, the average was 5.09 per cent.
The rate jump comes on the back on another potential interest rate rise from the Federal Reserve, according to Sam Khater, Freddie Mac’s chief economist.
He said: “Mortgage rates jumped this week, as a buoyant economy has prompted the market to price-in the likelihood of another Federal Reserve rate hike.
“Although there has been a steady flow of purchase demand around rates in the low to mid-six per cent range, that demand is likely to weaken as rates approach seven per cent.”
The 15-year fixed rate mortgage also increased from last week, averaging 6.18 per cent, up from 5.97 per cent last week. A year ago the average was 4.32 per cent.
Rate at its highest since November
A separate weekly survey from the Mortgage Bankers Association (MBA) also saw rates rise.
The MBA reported that the interest rate for 30-year fixed rate mortgages increased to 6.91 per cent from 6.69 per cent a week earlier, while the average rate for the 15-year equivalents grew to 6.41 per cent from 6.15 per cent a week ago.
Mortgage applications decreased 3.7 per cent from one week earlier.
Mike Fratantoni, MBA’s SVP and chief economist, said: “Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon.
“Mortgage rates for conforming, balance 30-year loans were being quoted above 7 per cent by some lenders last week, and the weekly average at 6.9 per cent reached the highest level since last November. Application volumes for both purchase and refinance loans decreased last week due to these higher rates.
