In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.39 per cent, up from last week when it stood at 6.35 per cent. A year ago, the average was 5.25 per cent.
Experts at Freddie Mac noted that the rise was marginal and that, despite affordability issues, buyers were returning to the market.
Sam Khater, Freddie Mac’s chief economist, said: “The 30-year fixed-rate mortgage averaged 6.39 per cent this week, as economic cross currents have kept rates within a 10 basis point range over the last several weeks.
“After the substantial slowdown in growth last fall, home prices stabilised during the winter and began to modestly rise over the last few months. This indicates that while affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership.”
The 15-year fixed rate mortgage remained unchanged from last week, averaging 5.75 per cent. A year ago the average was 4.43 per cent.
Applications rise but housing supply holds back growth
A separate weekly survey from the Mortgage Bankers Association (MBA) also saw rates rise.
The MBA reported that the interest rate for 30-year fixed rate mortgages increased to 6.57 per cent from 6.48 per cent a week earlier, while the average rate for the 15-year equivalents grew to 5.96 per cent from 5.91 per cent a week ago.
The rise in rates saw applications decrease by five per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates increased last week even as Treasury yields were essentially flat.
“Mortgage application activity slowed, as most mortgage rates in the survey increased, with the 30-year fixed rate jumping nine basis points to its highest level in two months at 6.57 per cent.
“Purchase applications decreased to the slowest pace in a month, as buyers remain wary of this rate volatility, but also as for-sale inventory in many parts of the country remains scarce.”
