The 30-year fixed-rate mortgage (FRM) averaged 6.12% this week, just slightly up from 6.09% the previous week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac. The slight turnabout after several weeks of declining rates comes on the heels of last week’s modest interest rate hike by the Fed and a strong jobs report.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 6.12% as of February 9, 2023, up from last week when it averaged 6.09%. A year ago at this time, the 30-year FRM averaged 3.69%.
- 15-year fixed-rate mortgage averaged 5.25%, up from last week when it averaged 5.14%. A year ago at this time, the 15-year FRM averaged 2.93%.
What the experts are saying:
“Following an interest rate hike from the Federal Reserve and a surprisingly strong jobs report, mortgage rates increased slightly this week,” said Sam Khater, Freddie Mac’s chief economist. “The 30-year fixed-rate continues to hover close to six percent, and interested homebuyers are easing their way back to the market just in time for the spring homebuying season.”
Realtor.com manager of economic research, George Ratiu, commented:
“The Freddie Mac fixed rate for a 30-year loan saw a rebound after several weeks of declines, rising to 6.12%. Investors reacted to the stronger than expected employment data and Fed Chairman Powell’s remarks which highlighted that–in light of the resilient economy–the central bank expects inflation to remain higher for a longer period, requiring sustained monetary tightening.
“The tension between expectations and economic data will continue to permeate financial markets for several more months. On the one hand, investors have been expecting the economy to fall into a recession following the Fed’s rate hikes, assuming that higher borrowing costs will make it ever more challenging for consumers to continue spending on credit. On the other hand, the combination of a strong job market and pandemic savings mean that Americans have maintained a steady consumption pace even as they switched their focus from goods to services.
“Mortgage rates are likely to continue moving up and down in a narrow range for the next few weeks. For housing markets, current rates remain a significant barrier to affordability, especially for first-time homebuyers. At the same time, there are several undercurrents which continue to reshape market dynamics.
“With employment still running at a strong pace, wages continue rising, putting more money in households’ budgets. Simultaneously, median list prices have declined 11% from their summer peak, resulting in lower down payments and monthly mortgage costs. In addition, with interest rates still running well-below the 7% range we saw in the fall, the psychological shock of the 2022 rate jump is wearing off for buyers, leading to a favorable adjustment in expectations. For the buyers of a median-priced home, today’s rate is translating into a $1,943 monthly payment (excluding taxes and insurance), $164 lower than in June 2022, when list prices hit their peak,” Ratiu concluded.