Mortgage rates continued their upward trajectory for the fourth straight week, rising to their highest level since the beginning of the pandemic, according to this week’s report from Freddie Mac.
According to the agency’s Primary Mortgage Market Survey® (PMMS), the 30-year fixed mortgage rate averaged 3.56% for the week ending Jan. 20, climbing another 0.7 points from a week ago.
“Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” said Sam Khater, Freddie Mac’s Chief Economist.
“As a result of higher mortgage rates, purchase demand has modestly waned in advance of the spring homebuying season. However, supply remains near historically tight levels and home prices remain high, keeping the market competitive.”
“Homebuyers remain active in today’s markets, despite the winter’s cold weather and snowstorms, seeking to take advantage of current rates before they rise even higher,” said George Ratiu, realtor.com Manager of Economic Research.
“The unseasonably strong demand, combined with many sellers taking a break during the holidays, is keeping prices high. On a positive note, construction of new homes picked up speed at the tail end of 2021, and there are signs that builders will maintain a solid pace throughout the year. Housing markets are in clear need of a significant influx of new homes to meet the growing needs of buyers. Looking to the year ahead, however, housing markets will contend with headwinds, including rising lumber prices, inflation, and the continued issue that there are just not enough homes available. In addition, higher mortgage rates will squeeze many first-time buyers’ budgets. At today’s rate, the buyer of a median-priced home is paying $238 more on a monthly payment compared with a year ago, adding close to $2,900 to the yearly housing cost burden.”