Nearing a return to 7% territory, the 30-year-fixed-rate mortgage continued its ascent this week, up to 6.9% from last week’s average of 6.77%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- The 30-year FRM averaged 6.90% as of February 22, 2024, up from last week when it averaged 6.77%. A year ago at this time, the 30-year FRM averaged 6.50%.
- The 15-year FRM averaged 6.29%, up from last week when it averaged 6.12%. A year ago at this time, the 15-year FRM averaged 5.76%.
What the experts are saying:
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” said Sam Khater, Freddie Mac’s chief economist. “Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market. The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”
Realtor.com Economist, Jiayi Xu commented:
“The Freddie Mac fixed rate for a 30-year mortgage increased 0.13%age points to 6.9% this week. Even though the FOMC has acknowledged the likelihood of rate cuts in 2024, the post-meeting statement on Wednesday emphasized that policymakers do not want to rush it. In essence, Federal Reserve officials are seeking more concrete evidence of sustained improvement in inflation before making any changes. Looking forward, the release of updated economic projections in March’s FOMC meeting and Chair Powell’s subsequent discussion of these projections in the post-meeting press conference may provide more insights into the Federal Reserve’s degree of concern regarding external factors. Additionally, these discussions could shed light on the positive developments needed to bolster their confidence in pursuing rate cuts.
“Spring generally marks a pivotal moment in the housing market, shifting from the slower winter pace to a busy period of the housing market. In fact, recent surges in new listing activities suggested that we might have a busy spring ahead. However, the recent increase in mortgage rates has the potential to slow the market by disrupting the plans of many buyers, especially in a market where a significant number of consumers are anticipating lower mortgage rates, not higher. Consequently, it is crucial for homebuyers to safeguard their budget against rate fluctuations by utilizing a mortgage calculator, such as the one available at Realtor.com, to comprehend the impact of mortgage rate changes on their payments and purchasing plans. In addition, a better understanding of all available loan options, such as assumable mortgages, could help homebuyers get access to lower mortgage rates.”
