Average rates in the US mortgage market increased this week, although demand has also seen an uplift. In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.66 per cent, marginally up from last week when they stood at 6.62 per cent. A year ago, the average rate was 6.33 per cent.
Sam Khater, Freddie Mac’s chief economist, noted the affordability challenges still faced by US homebuyers.
He said: “Mortgage rates have not moved materially over the last three weeks and remain in the mid-six per cent range, which has marginally increased homebuyer demand.
“Even this slight uptick in demand, combined with inventory that remains tight, continues to cause prices to rise faster than incomes, meaning affordability remains a major headwind for buyers.”
The 15-year fixed rate mortgage averaged 5.87 per cent, down from 5.89 per cent last week. A year ago, the average stood at 5.52 per cent.
US mortgage rates rise but applications follow suit
A separate survey from the Mortgage Bankers Association (MBA) noted that rates had also risen, though only marginally. The slight increase had no downward effect on applications, however, which increased by 9.9 per cent from one week earlier.
The MBA reported that the average rate for 30-year fixed rate mortgages rose to 6.81 per cent, up from last week’s 6.76 per cent. Meanwhile, the average rate for the 15-year equivalent increased to 6.41 per cent from 6.26 per cent last week.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday.
“The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines. Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”
