After a brief dip, interest rates are back on the rise. Freddie Mac its latest Primary Mortgage Market Survey (PMMS), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.85%.
Key findings:
- 30-year fixed-rate mortgage averaged 3.85% with an average 0.8 point for the week ending March 10, 2022, up from last week when it averaged 3.76%. A year ago at this time, the 30-year FRM averaged 3.05%.
- 15-year fixed-rate mortgage averaged 3.09% with an average 0.8 point, up from last week when it averaged 3.01%. A year ago at this time, the 15-year FRM averaged 2.38%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.97% with an average 0.3%, up from last week when it averaged 2.91%. A year ago at this time, the 5-year ARM averaged 2.77%.
The takeaway:
“Following two weeks of declines, mortgage rates rose this week as U.S. Treasury yields increased,” said Sam Khater, Freddie Mac’s chief economist. “Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy. However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short-term.”
“The Freddie Mac fixed rate for a 30-year loan rebounded this week, following the jump in the 10-year Treasury, which topped 1.95%, said realtor.com® manager of economic research, George Ratiu. “Investors worried about mounting inflation stemming from a likely ban on Russian oil imports amid a spike in the price of U.S. crude to more than $130 per barrel, the highest point in 13 years. Inflation is expected to show continued acceleration in February, sparking broader concerns about a consumer spending pullback in the months ahead. All eyes are on the Federal Reserve meeting next week, as we expect the bank to increase the funds rate. The big question on many analysts’ minds is whether a 25-basis point hike will be enough given the significant shortage of labor and inflation at levels not seen since the 1980s.”
He added, “Real estate markets are experiencing accelerating prices, tight inventory and faster sell times, even before the spring season gets underway. Realtor.com®’s latest weekly data highlights the competitive landscape, with homes selling in 47 days or less, the fastest monthly pace on record, even before the pandemic. In turn, listing prices have once again hit new record highs, raising fresh concerns for buyers feeling squeezed by higher interest rates and inflation. At today’s rate, the buyer of a median-priced home is facing a mortgage payment more than $280 per month higher than a year ago. With not enough homes for sale both first-time buyers and homeowners looking for a trade-up home are locked in place by surging prices and higher interest rates. The real challenge for Americans is that the high inflation is eating away at the growth in wages and salaries, on top of spiking housing and living costs.”
