The 30-year-fixed-rate mortgage average 6.77% this week, up from last week’s average of 6.64%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac.
This week’s numbers:
- The 30-year FRM averaged 6.77% as of February 15, 2024, up from last week when it averaged 6.64%. A year ago at this time, the 30-year FRM averaged 6.32%.
- The 15-year FRM averaged 6.12%, up from last week when it averaged 5.90%. A year ago at this time, the 15-year FRM averaged 5.51%.
What the experts are saying:
“On the heels of consumer prices rising more than expected, mortgage rates increased this week,” said Sam Khater, Freddie Mac’s chief economist. “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier.”
Realtor.com Sr. Economic Research Analyst, Hannah Jones commented:
“The Freddie Mac fixed rate for a 30-year mortgage climbed 13 basis points to 6.77% this week, reaching the highest level so far in 2024 amid still-strong employment and inflation data. The January CPI data showed that inflation slowed year-over-year, but picked up compared to the previous month. Shelter inflation, which reflects home price and rental trends, continues to be the biggest driver of overall inflation. Though shelter inflation was below its March 2023 peak of 8.2%, shelter costs rose 6.0% over the last year, pulling overall inflation measures higher. At the February FOMC meeting, Chair Powell emphasized that it is unlikely that we will see a rate cut in March as incoming economic data remains fairly strong. The latest inflation and employment measures retained strength in January, confirming that a rate cut is unlikely in March. As a result, mortgage rates are likely to continue to hover in the high-6% range until more definitive progress has been made towards 2% inflation.
While shelter costs remain elevated, we expect rents to ease further as more rental stock comes online. Rents have fallen annually for the last 8 months, but remain near peak at the national level, meaning that renters have not yet seen much relief. On the for-sale side, buyers and sellers tend to jump back into the housing market as spring approaches. This spring, buyers are likely to see lower mortgage rates than in the fall of 2023, which may mean more eager buyers in the market. However, many homeowners still feel locked-in by elevated mortgage rates, which could lead to upward pressure on prices if buyer demand picks up faster than seller activity. Seller activity has increased annually for the last few months, leading to an increase in available home inventory. While the number of homes for sale remains well below pre-pandemic levels, this recent trend represents a small shift towards a more buyer-friendly market.”
