Mortgage rates inched up again this week, a six-week runup to date and not expected to stabilize by the end of the year, experts noted.
The 30-year fixed-rate mortgage averaged 6.79% this week, up from the previous week’s average of 6.72%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday. The average is the highest since July, and the 10-year treasury hitting nearly 4.5% yesterday–the highest level since April, economists noted.
While much of the mortgage rate data that feeds into this week’s number was based on lower, but still rising, pre-election treasury yields, the expectation is for mortgage rates to continue to rise in the coming weeks based on the trend in post-election yields, said Realtor.com Senior Economist Ralph McLaughlin.
Why are 10-year yields, and thus mortgage rates, rising so quickly after the Trump and Republican election win?
McLaughlin explains, “While it’s not always 100% clear what markets are thinking, they could be expecting a combination of stronger economic growth, more fiscal spending, and higher prices/inflation (because of more tariffs and lower taxes).
“Homebuyers hoping for another dip in mortgage rates by the end of the year will likely be disappointed, McLaughlin added, “but the good news is we still expect the long-run trend in rates to be downward as the fight against pandemic-induced inflation comes to an end.”
Sam Khater, Freddie Mac’s chief economist, emphasized that a recent sharp drop in purchase applications reflects the ongoing rate increases.
“It is clear purchase demand is very sensitive to mortgage rates in the current market environment,” Khater said. “As soon as rates began to rise in early October, purchase applications fell and over the last month have declined 10%.”
This week’s numbers
- The 30-year FRM averaged 6.79% as of November 7, 2024, up from last week when it averaged 6.72%. A year ago at this time, the 30-year FRM averaged 7.50%.
- The 15-year FRM averaged 6.0%, up from last week when it averaged 5.99%. A year ago at this time, the 15-year FRM averaged 6.81%.
On an optimistic note, McLaughlin added that homebuyers who are frustrated by higher interest rates should turn to the increasing buyer-friendly characteristics in the housing market, such as the highest inventory since December 2019, the slowest seasonal market in five years, and nearly 20% of listings coming with price cuts, he noted.
