After a month of rising mortgage rate increases, this week’s data shows a flattening, according to Freddie Mac’s Primary Mortgage Survey. The rate increases have not significantly impacted demand in the real estate market, although gradual increases are expected to continue soon. Freddie Mac suggest that now is still a good time for homeowners to refinance now.
U.S. weekly averages:
- 30-Year Fixed Rate Mortgage – 3.55% (down .01 week over week, up .78 YoY)
- 15-Year Fixed Rate Mortgage – 2.8% (up .01 week over week, up .59 YoY)
- 5/1 Year Adjusted Rate Mortgage – 2.7 (up .1 week over week, up .1 YoY)
What it means:
“The Freddie Mac fixed rate for a 30-year loan steadied this week, dropping 1 basis point to 3.55%, in line with longer-term rates. This week’s Fed meeting reinforced the idea that interest rates are moving higher, with Fed rate hikes likely to begin as soon as March. However, long-term Treasuries bounced down and then up again this week, as investors evaluated whether they are correctly positioned to navigate the tightrope of a Fed tightening cycle and other economic growth risks against a still-strong economy. Despite this flattening, which is likely just a temporary reprieve, mortgage rates remain 50 basis points higher than they were roughly one month ago.
Rising mortgage rates and inflation are creating a hefty incentive for homebuyers to move sooner rather than later, but the fast-paced housing market is making finding the right home a challenge. Even though rising home prices, which ticked higher this week, and mortgage rates have driven up the monthly cost of buying, rising rents, which surged by double-digits in 2021, are a key motivator for first-time home buyers. Despite affordability challenges, the sheer number of potential first-time buyers on the market are expected to keep home sales rising in 2022.” —Danielle Hale, realtor.com® chief economist