In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.18 per cent, down from last week when they were 7.23 per cent. A year ago, the average was 5.66 per cent.
Sam Khater, Freddie Mac’s chief economist, noted that, despite the marginal fall, rates were still high and forecasts for the future direction of travel were uncertain.
He said: “As rates remain high and supply of unsold homes woefully low, incoming data shows that existing homes sales continue to fall. However, there are slightly more new homes available, and sales of these new homes continue to rise, helping provide modest relief to the unyielding housing inventory predicament.
“Mortgage rates leveled off this week but remain elevated. Despite continued high rates, low inventory is keeping house prices steady. Recent volatility makes it difficult to forecast where rates will go next, but we should have a better gauge in September as the Federal Reserve determines their next steps regarding interest rate hikes.”
The 15-year fixed rate mortgage remained unchanged and averaged at 6.55 per cent. A year ago, the average stood at 4.98 per cent.
Rates at record highs but applications inch upwards
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed record highs in 30-year fixed rate deals.
The MBA reported that the average rate for 30-year fixed rate mortgages was 7.31 per cent, unchanged from last week. The average rate for the 15-year equivalents was also static at 6.72 per cent.
Despite soaring rates, the MBA survey also noted that mortgage applications had increased by 2.3 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates were mostly unchanged last week, with the 30-year fixed rate remaining at 7.31 percent – the highest since December 2000. Treasury yields peaked early in the week and did move lower by the end, which may have spurred some activity.
“Mortgage applications for home purchases and refinances increased for the first time in five weeks but remained at low levels. Purchase applications increased but were still 27 per cent lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home buying activity.”
