In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.96 per cent, up from last week when it was 6.90 per cent. A year ago, the average was 5.22 per cent.
Sam Khater, Freddie Mac’s chief economist, noted that increased rates had a downward effect on house buying, although he also pointed out that a ‘resilient economy’ was likely to keep demand ‘stable’.
He said: “For the third straight week, mortgage rates continued creeping up and are now just shy of seven per cent.
“There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again.
“However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”
The 15-year fixed rate mortgage also rose, averaging 6.34 per cent, up from 6.25 per cent last week. A year ago, the average stood at 4.59 per cent.
Seven per cent mark already breached, says MBA
A separate weekly survey from the Mortgage Bankers Association (MBA) revealed that, by its measure, rates had already passed the seven per cent mark.
The MBA reported that the average rate for 30-year fixed rate mortgages rose to 7.09 per cent from 6.93 per cent last week, while the average rate for the 15-year equivalents increased to 6.51 per cent, from 6.39 per cent last week.
The MBA survey also noted that mortgage applications had decreased by 3.1 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates [rose] due to a combination of the Treasury’s funding announcement and the downgrading of the US government debt rating [by Fitch Ratings].
“Rates increased for all loan types in our survey, with the 30-year fixed mortgage rate increasing to 7.09 percent, the highest level since November 2022.
“Not surprisingly, mortgage applications continued to decline given these higher rates, with overall application counts falling for the third consecutive week, as both purchase and refinance activity declined. The purchase index fell for the fourth consecutive week, as homebuyers continue to struggle with low for-sale inventory and elevated mortgage rates.”
