In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.81 per cent, up marginally from last week when it was 6.71 per cent. A year ago, the average was 5.30 per cent.
Sam Khater, Freddie Mac’s chief economist highlighted that continued high rates were pricing buyers out of the market.
He said: “Mortgage rates continued their upward trajectory again this week, rising to the highest rate this year so far.
“This upward trend is being driven by a resilient economy, persistent inflation and a more hawkish tone from the Federal Reserve. These high rates combined with low inventory continue to price many potential homebuyers out of the market.”
The 15-year fixed rate mortgage also rose, averaging 6.24 per cent, up from 6.06 per cent last week. A year ago the average was 4.45 per cent.
Rates up, applications down
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 6.85 per cent from 6.75 per cent a week earlier, while the average rate for the 15-year equivalents rose marginally to 6.30 per cent, from 6.23 per cent last week.
Mortgage applications decreased 4.4 per cent from one week earlier, with the MBA noting that borrowers were still ‘sensitive to rate increases.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased. The 30-year fixed rate increased to 6.85 per cent, the highest rate since the end of May.
“Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country.
“However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”
