In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.79 per cent, up from last week when they were 7.63 per cent. A year ago, the average was 7.08 per cent.
Sam Khater, Freddie Mac’s chief economist, highlighted how the steep rise in rates was spooking homebuyers as we head into Halloween.
He said: “For the seventh week in a row, mortgage rates continued to climb toward eight per cent, resulting in the longest consecutive rise since the Spring of 2022.
“Rates have risen two full percentage points in 2023 alone and, as we head into Halloween, the impacts may scare potential homebuyers. Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.”
The 15-year fixed rate mortgage averaged 7.03 per cent, up from 6.92 per cent a week ago. A year ago, the average stood at 6.36 per cent.
Applications at lowest level since 1995
A separate weekly survey from the Mortgage Bankers Association (MBA) also revealed that rates were heading toward eight per cent as applications fell to their lowest levels since 1995.
The MBA reported that the average rate for 30-year fixed rate mortgages was 7.90 per cent, up from 7.70 per cent last week. The average rate for the 15-year equivalents rose to 7.08 per cent from 6.98 per cent last week.
Meanwhile, mortgage applications decreased 1.0 percent from one week earlier, their lowest level in since 1995.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits. Mortgage rates followed Treasuries higher, with the 30-year fixed mortgage rate jumping 20 basis points to 7.90 per cent – the highest since 2000. Rates have now risen seven consecutive weeks at a cumulative amount of 69 basis points.
“Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995. These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity.”
