In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.63 per cent, up from last week when they were 7.57 per cent. A year ago, the average was 6.94 per cent.
Sam Khater, Freddie Mac’s chief economist, highlighted how rising rates were hitting homebuyers and builders respectively.
He said: “Mortgage rates continued to approach eight per cent this week, further impacting affordability. In this environment, it’s important that borrowers shop around with multiple lenders for the best mortgage rate. With research showing down payment is the single largest barrier to first-time homebuyers attaining homeownership, borrowers should also ask their lender about down payment assistance.”
Khater continued: “Not only are homebuyers feeling the impact of rising rates, but home builders are as well. Incoming data shows that the construction of new homes rebounded in September but as rates keep rising, home builders appear to be losing confidence. As a result, we expect construction to trend down in the short-term.”
The 15-year fixed rate mortgage averaged 6.92 per cent, up from 6.89 per cent a week ago. A year ago, the average stood at 6.23 per cent.
Applications at lowest level since 1995
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed sky-high rates and rock-bottom applications.
The MBA reported that the average rate for 30-year fixed rate mortgages was 7.70 per cent, up from 7.67 per cent last week. The average rate for the 15-year equivalents rose to 6.98 per cent, the highest level since July 2001, from 6.87 per cent.
Meanwhile, mortgage applications decreased 6.9 percent from one week earlier, their lowest level in 28 years.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Applications decreased to their lowest level since 1995, as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.70 percent – the highest level since November 2000.
“Both purchase and refinance applications declined, driven by larger drops for conventional applications. Purchase applications were 21 per cent lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory. Refinance activity was at its lowest level since early 2023. There is very limited refinance incentive with mortgage rates at multi-decade highs.”
