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 6.78 per cent. A year ago, the average was 5.30 per cent.
Sam Khater, Freddie Mac’s chief economist, highlighted that rising interest rates were holding back purchases despite consumer confidence hitting a two-year high.
He said: “Mortgage rates inched up slightly after a significant decline last week. Higher interest rates continue to dampen activity in interest rate-sensitive sectors, such as housing.
“However, overall US consumer confidence is unwavering, surging to a two-year high in the Conference Board’s Consumer Confidence Index for July 2023.
“Rising consumer confidence often leads to greater spending, which could drive more consumers into the housing market.”
The 15-year fixed rate mortgage also rose, averaging 6.11 per cent, up from 6.06 per cent last week. A year ago the average was 4.58 per cent.
Applications down as rates remain high
A separate weekly survey from the Mortgage Bankers Association (MBA) noted that rates had stayed static for the week but were still historically high.
The MBA reported that the average rate for 30-year fixed rate mortgages stayed at 6.87 per cent, while the average rate for the 15-year equivalents rose marginally to 6.37 per cent, from 6.36 per cent last week.
Mortgage applications decreased 1.8 per cent from one week earlier, with the MBA noting the continued high interest rate environment was hindering homebuyers.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates were essentially flat last week but remained high, with the 30-year fixed rate staying at 6.87 per cent and contributing to a pullback in mortgage applications.
“The decrease in purchase applications contributed to an increase in the overall average purchase loan size to $432,700, its highest level since the end of this May. Refinance applications remained lackluster, running 30 per cent behind year-ago levels. Many borrowers remain on the sidelines given current rates and persistent affordability challenges.”
