In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.31 per cent, up from last week when they were 7.19 per cent. A year ago, the average was 6.7 per cent.
The 15-year fixed rate mortgage averaged 6.72 per cent, up from 6.54 per cent a week ago. A year ago, the average stood at 5.96 per cent.
Record rates hit homebuyers
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed soaring rates and a drop-off in applications.
The MBA reported that the average rate for 30-year fixed rate mortgages was 7.41 per cent, up from 7.31 per cent last week. The average rate for the 15-year equivalents rose to 6.73 per cent, the highest level since July 2001, from 6.62 per cent.
The survey also revealed that mortgage applications had fallen by 1.3 per cent from one week earlier as “buyers feel the impact of elevated rates”.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates moved to their highest levels in over 20 years as Treasury yields increased late last week. The 30-year fixed mortgage rate increased to 7.41 per cent, the highest rate since December 2000.
“Overall applications declined, as both prospective homebuyers and homeowners continue to feel the impact of these elevated rates. The purchase market, which is still facing limited for-sale inventory and eroded purchasing power, saw applications down over the week and 27 per cent behind last year’s pace. Refinance activity was down over 20 per cent from last year and accounted for approximately one third of applications. Many homeowners have little incentive to refinance.”
