Mortgage rates fell a bit more this week from the week prior, according to Freddie Mac’s latest weekly Primary Mortgage Market Survey (PMMS), which showed that the 30-year fixed-rate mortgage (FRM) averaged 3.76%, down from 3.89% last week.
Key findings:
- 30-year fixed-rate mortgage averaged 3.76% with an average 0.8 point for the week ending March 3, 2022, down from last week when it averaged 3.89%. A year ago at this time, the 30-year FRM averaged 3.02%.
- 15-year fixed-rate mortgage averaged 3.01% with an average 0.8 point, down from last week when it averaged 3.14%. A year ago at this time, the 15-year FRM averaged 2.34%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91% with an average 0.3 point, down from last week when it averaged 2.98%. A year ago at this time, the 5-year ARM averaged 2.73%.
The takeaway:
“Geopolitical tensions caused U.S. Treasury yields to recede this week as investors moved to the safety of bonds, leading to a drop in mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist. “While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.”
“The Freddie Mac fixed rate for a 30-year loan continued its retreat, with a 13-basis-point slide to 3.76% this week, following the sharp drop in the 10-year Treasury earlier in the week. Investors are concerned about the deepening Russia-Ukraine conflict and rising oil prices, and are wary of spillover effects from rising economic sanctions. Markets have their eyes on mounting inflation and expect the Federal Reserve to proceed with a 25-basis-point hike at its upcoming mid-March meeting. Market volatility and rising oil prices are likely to push bond yields into larger swings, while inflation will keep upward pressure on mortgage rates,” said Realtor.com manager of economic research, George Ratiu.
He continued: “Real estate markets are seeing an early start to the spring buying season, with unseasonably high demand running into a small number of homes for sale. This imbalance led to a typical home selling in just 47 days, and pushed listing prices to a new record high in February, as higher mortgage rates further squeezed buyers’ budgets. At today’s rate, the buyer of a median-priced home will pay over $278 per month more than a year ago on their mortgage payment. Surging prices and higher rates are creating challenges for first-time buyers looking for a home, causing them to make difficult choices in light of higher monthly costs for food, gasoline, clothing, cars and health care.”
