The 30-year fixed-rate mortgage (FRM) averaged 3.11% for the week ending Dec. 30, 2021, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac.
Mortgage details:
– The 30-year fixed-rate mortgage averaged 3.11% with an average 0.7 point, up from last week when it averaged 3.05%. Last year, the 30-year FRM averaged 2.67%.
– The 15-year fixed-rate mortgage averaged 2.33% with an average 0.7 point, up from last week when it averaged 2.30%. Last year, the 15-year FRM averaged 2.17%.
– The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.41% with an average 0.5 point, up from last week when it averaged 2.37%. Last year, the 5-year ARM averaged 2.71%.
The takeaway:
“Mortgage rates have effectively been moving sideways despite the increase in new COVID cases. This is because incoming economic data suggests that the economy remains on firm ground, particularly cyclical industries like manufacturing and housing. Moreover, low interest rates and high asset valuations continue to drive consumer spending. While we do expect rates to rise, the push of the first-time homebuyer demographic that’s been propelling the purchase market will continue in 2022 and beyond.” — Freddie Mac Chief Economist Sam Khater
“In the last reading of 2021, the Freddie Mac fixed rate for a 30-year mortgage ticked up from last week’s dip, reaching 3.11%, and moving back in line with its average since mid-November. Investors have reacted with increasing optimism following initial caution in response to the emergence of the omicron variant, even as case counts grow. This is reflected not only in stocks hitting record highs, but also in rates for 10-year Treasuries, which surpassed a 1.5% yield on Wednesday for only the second time in December.
“If higher rates in longer-term Treasuries can be sustained, which will likely require stable or improving news around omicron and COVID, that will mean higher mortgage rates for homebuyers. However, this will also likely mean a strong economic backdrop in the form of favorable job market dynamics that will help homebuyers better face the hurdle of higher housing costs. With rates and home prices both rising, hopeful buyers will need to be prepared to contend with today’s housing market. In addition to rising costs, buyers will likely face stiff competition, especially early in 2022, as rising mortgage rates spur some to hasten home-buying plans.” — realtor.com® Chief Economist Danielle Hale
