In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.09 per cent, up from last week when it was 6.96 per cent. A year ago, the average was 5.13 per cent.
Sam Khater, Freddie Mac’s chief economist, noted that the robust economic picture and rising Treasury yield had forced rates up to their highest level in two decades.
He said: “The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb.
“The last time the 30-year fixed-rate mortgage exceeded seven per cent was last November. Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales.”
The 15-year fixed rate mortgage also rose, averaging 6.46 per cent, up from 6.34 per cent last week. A year ago, the average stood at 4.55 per cent.
Rates up, applications down, says MBA
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed that 30-year fixed rate deals were spiking.
The MBA reported that the average rate for 30-year fixed rate mortgages rose to 7.16 per cent from 7.09 per cent last week, while the average rate for the 15-year equivalents increased to 6.57 per cent, from 6.51 per cent last week.
The MBA survey also noted that mortgage applications had decreased by 0.8 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Treasury rates were elevated again last week following mixed data on inflation and more indication of resiliency in the economy, which may pose a challenge to the Federal Reserve’s efforts to lower inflation.
“The 30-year fixed mortgage rate increased for the third straight week, reaching 7.16 per cent, matching October 2022’s rate and the highest rate since 2001.
“Overall applications decreased because of these higher rates, as both purchase and refinance applications ended the week at their lowest levels since February 2023.”
