Mortgage rates essentially remained unchanged from the previous week with the 30-year fixed-rate mortgage (FRM) averaging 5.09%, inching down from 5.10% last week, according to the latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday.
- 30-year fixed-rate mortgage averaged 5.09% with an average 0.8 point as of June 2, 2022, down slightly from last week when it averaged 5.10%. A year ago at this time, the 30-year FRM averaged 2.99%.
- 15-year fixed-rate mortgage averaged 4.32% with an average 0.8 point, up slightly from last week when it averaged 4.31%. A year ago at this time, the 15-year FRM averaged 2.27%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.04% with an average 0.3 point, down from last week when it averaged 4.20%. A year ago at this time, the 5-year ARM averaged 2.64%.
What the experts are saying:
“Mortgage rates continued to inch downward this week but are still significantly higher than last year, affecting affordability and purchase demand,” said Sam Khater, Freddie Mac’s chief economist. “Heading into the summer, the potential homebuyer pool has shrunk, supply is on the rise and the housing market is normalizing. This is welcome news following unprecedented market tightness over the last couple years.”
Hannah Jones, economic data analyst at realtor.com®, commented, “The Freddie Mac fixed rate for a 30-year mortgage remained relatively flat this week, decreasing by 1 basis point from 5.1% to 5.09%. Yields on 10-yr treasury notes increased 19 basis points over last week’s low, reaching 2.93% on Tuesday, as rising prices and interest rate hikes continue to be top-of-mind for investors. After a tumultuous month characterized by widespread concern around inflation and the possibility of recession, the stock market ended the month of May roughly where it started after a rally last week. In a meeting with Federal Reserve Chair Powell and Treasury Secretary Yellen, President Biden voiced his support of the Fed’s actions to rein in inflation and pledged to refrain from influencing interest rate decisions. Powell and Fed officials continued to emphasize their commitment to taking action in upcoming meetings to rein in prices and achieve 2% inflation. In line with that goal, year-over-year consumer price growth slowed in April for the first time since August 2021, dropping from 8.6% in March to 8.2% in April, a welcome sign of progress.
“The decrease in the mortgage rates over the last couple weeks has offered some relief to buyers who have faced a relentless rise in home prices. High prices and recent interest rate hikes slowed down buyer activity in April as shown by a month-over-month drop in existing home sales (-2.4%), new home sales (-16.6%), and pending home sales (-3.9%), as some buyers opted out of the market altogether. Home buyers continued to contend with record-high home prices in May, however hope is on the horizon as the latest week’s housing data shows another increase in the number of homes for sale compared to last year. And while inventory is still low by historical standards, it is starting to tilt in a more buyer-friendly direction. This is likely to lead to slower price growth in the not-so-distant future as sellers compete for buyers, finally creating a more balanced market. However, those who are currently home shopping will tell you that we’re not there yet, as still-high interest rates and home prices are creating challenges in finding their ideal home,” Jones concluded.