In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.57 per cent, up from last week when they were 7.49 per cent. A year ago, the average was 6.92 per cent.
Sam Khater, Freddie Mac’s chief economist, noted current geopolitical volatility and affordability challenges as key factors restraining the US market
He said: “For the fifth consecutive week, mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase.
“The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low.”
The 15-year fixed rate mortgage averaged 6.89 per cent, up from 6.78 per cent a week ago. A year ago, the average stood at 5.90 per cent.
Rates at a 23-year high
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed that rates were at their highest levels since the turn of the millennium.
The MBA reported that the average rate for 30-year fixed rate mortgages was 7.67 per cent, up from 7.53 per cent last week. The average rate for the 15-year equivalents rose to 6.97 per cent, the highest level since July 2001, from 6.86 per cent.
Despite soaring rates, the survey also noted that mortgage applications had risen marginally by 0.6 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “The 30-year fixed mortgage rate is at 7.67 per cent – the highest level since 2000 and 40 basis points higher than a month ago.
“Application activity remains depressed and close to multi-decade lows, with purchase applications still almost 20 per cent behind last year’s pace. Refinance applications also continue to be limited, and the average loan size has fallen to its lowest level since 2017.”
