The 30-year fixed-rate mortgage (FRM) averaged 6.60%, a pullback from last week’s fifth-straight week of increases to 673%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers
- 30-year fixed-rate mortgage averaged 6.60% as of March 16, 2023, down from last week when it averaged 6.73%. A year ago at this time, the 30-year FRM averaged 4.16%.
- 15-year fixed-rate mortgage averaged 5.90%, down from last week when it averaged 5.95%. A year ago at this time, the 15-year FRM averaged 3.39%.
What the experts are saying
“Mortgage rates are down following an increase of more than half a percent over five consecutive weeks,” said Sam Khater, Freddie Mac’s chief economist. “Turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short-term. During times of high mortgage rate volatility, homebuyers would greatly benefit from shopping for additional rate quotes. Our research concludes that homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among multiple lenders.”
Hannah Jones, economic research analyst at Realtor.com, commented:
“The Freddie Mac fixed rate for a 30-year loan fell 0.13 percentage points to 6.6% this week as uncertainty in the banking sector sent investors to find a safe haven in Treasury bonds. The flight to government bonds resulted in yields on the 10-year Treasury note falling from near 4% at the beginning of last week to 3.4% by mid-week, thereby reversing the recent trend of climbing mortgage rates.
“Last week was a whirlwind of economic indicators and unforeseen events that sent mortgage rates reeling. At the beginning of last week, Chair Powell suggested that more aggressive rate hikes may be necessary to rein in inflation, which led to a sharp drop in the stock market and an increase in mortgage rates. However, at the end of the week, the failure and resulting bailout of Silicon Valley Bank led to heightened investor concern of additional bank closures, which pushed activity towards Treasury bonds, resulting in dropping yields on the 10-year treasury and a decrease in mortgage rates.
“February’s employment and inflation data both pointed to a still-hot, though slowly cooling, economy. All else being equal, this would likely mean a more aggressive rate hike at next week’s FOMC meeting. However, in light of last week’s bank failures, the committee may choose to remain conservative to ensure stability in the economy.
“Lower mortgage rates in December and January were coupled with an increase in housing demand, but ongoing economic uncertainty may have stifled some home-buying activity.
“However, as winter turns to spring, buyers and sellers tend to re-enter the housing market. This year, both prices and mortgage rates are higher than a year ago, resulting in a 43% increase in housing costs for the typical US home. This widespread unaffordability means that buyers are likely pickier when choosing to submit an offer. Sellers can drum up buyer demand during the approaching Best Time to Sell by ensuring their home is well-priced and well-maintained,” Jones concluded.