The 30-year fixed-rate mortgage (FRM) averaged 6.32% this week, an increase from last week’s 6.12%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac. Experts say we can expect rates to move in the 6% – 7% range over the next few weeks.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 6.32% as of February 16, 2023, up from last week when it averaged 6.12%. A year ago at this time, the 30-year FRM averaged 3.92%.
- 15-year fixed-rate mortgage averaged 5.51%, up from last week when it averaged 5.25%. A year ago at this time, the 15-year FRM averaged 3.15%.
What the experts think:
“Mortgage rates moved up for the second consecutive week,” said Sam Khater, Freddie Mac’s chief economist. “The economy is showing signs of resilience, mainly due to consumer spending, and rates are increasing. Overall housing costs are also increasing and therefore impacting inflation, which continues to persist.”
Realtor.com manager of economic research, George Ratiu, commented:
“The Freddie Mac fixed rate for a 30-year loan continued rising after last week’s rebound, with a 20 basis point jump to 6.32%, following the climb in the 10-year Treasury. Investors are digesting the latest economic data, including the positive numbers released this week, such as retail sales, the Consumer Price Index, and the indices for small-business optimism and homebuilder sentiment.
“While the Fed signaled that it will continue to raise rates this year, the moves are expected to come in 25 basis point increments, a less aggressive tightening than what we saw in 2022. The central bank is acknowledging that it sees its monetary actions having a tangible effect on inflation. The CPI data out this week seems to confirm the bank’s views.
“At the same time, many companies continue to expect the economy to enter a recession, as a result of the Fed’s rate hikes, even in the face of data pointing to continued resilience. This expectation is becoming more visible in the growing number of companies resorting to layoffs as a hedge against a potential economic slowdown. The real challenge may come from companies’ reaction, as a rising number of people losing their jobs may turn expectations into a self-fulfilling prophecy. People who are laid off pull back on spending, and even those who are still employed may begin to do the same due to worries about losing their job, thus potentially sending consumer spending into a downward spiral.
“Mortgage rates are going to move in the 6% – 7% range over the next few weeks. For housing markets, the rebound in rates translates into higher mortgage payments from a year ago, but lower than the summer 2022 peak of the market, because prices have dropped 11% over the past 7 months. The buyer of a median-priced home is looking at a $1,985 monthly payment at today’s rate, 42% higher than last year, yet 6% lower than it would have been in June 2022.”
