The latest Primary Mortgage Market Survey from the Federal Home Loan Mortgage Corporation (Freddie Mac) shows that the average 30-year fixed rate had crept up to 6.88% this week.
This was up from the average rate of 6.82% last week and higher than last year’s 6.27%.
Meanwhile, the average 15-year fixed rate came to 6.16%, up from the previous week’s average of 6.06%. Compared to last year, this was higher than the 15-year fixed rate average of 5.54%.
Sam Khater, Freddie Mac’s chief economist, said: “While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different economic picture. Since inflation decelerated from 9% to 3% between June 2022 and June 2023, the annual growth rate of inflation has remained effectively flat, ranging from 3.1% to 3.7% and averaging 3.3%. The March estimate of 3.5% annual growth is in the middle of that range. However, the market’s reaction was dramatically different, as illustrated by a significant drop in the Dow Jones Industrial Average post-announcement.”
Khater added: “It’s clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealised expectations of a recession from a year ago.”
Modest rise in US mortgage applications
Mortgage applications rose by 0.1%, according to the Mortgage Bankers Association’s (MBA’s) Weekly Mortgage Applications Survey.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates moved higher last week as several Federal Reserve officials reiterated a patient posture on rate cuts. Inflation remains stubbornly above the Fed’s target, and the broader economy continues to show resiliency.
“Unexpectedly strong employment data released last week further added to the upward pressure on rates.”
He added: “Purchase applications were down almost 5% to the lowest level since the end of February, but refinance applications were up 10%, driven particularly by Veterans Affairs refinance applications.”
The share of mortgage refinance activity increased from 30% last week to 33.3% of applications this week.
