In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.71 per cent, up marginally from last week when it was 6.67 per cent. A year ago, the average was 5.70 per cent.
Despite the rise in rates, Sam Khater, Freddie Mac’s chief economist highlighted that new home sales were at their highest point in over a year.
He said: “Mortgage rates have hovered in the six to seven per cent range for over six months and, despite affordability headwinds, homebuyers have adjusted and driven new home sales to its highest level in more than a year.
“New home sales have rebounded more robustly than the resale market due to a marginally greater supply of new construction. The improved demand has led to a firming of prices, which have now increased for several months in a row.”
The 15-year fixed rate mortgage also rose fractionally, averaging 6.06 per cent, up from 6.03 per cent last week. A year ago the average was 4.83 per cent.
Rates up, applications up…but only slightly
A separate weekly survey from the Mortgage Bankers Association (MBA) also saw longer-term rates rise.
The MBA reported that the average rate for 30-year fixed rate mortgages increased to 6.75 per cent from 6.73 per cent a week earlier, while the average rate for the 15-year equivalents actually fell marginally to 6.23 per cent, from 6.26 per cent last week.
Meanwhile, mortgage applications grew by three per cent from one week earlier, with the MBA also noting the rise in new home sales.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rate changes varied across loan types last week, with the 30-year fixed rate increasing slightly to 6.75 per cent.
“Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20 per cent lower than year ago levels.
“New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market. Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”
