The 30-year fixed-rate mortgage (FRM) jumped from last week’s average of 7.09% to an average of 7.23% this week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 7.23%, up from last week when it averaged 7.09%. A year ago at this time, the 30-year FRM averaged 5.55%.
- 15-year fixed-rate mortgage averaged 6.55%, up from last week when it averaged 6.46%. A year ago at this time, the 15-year FRM averaged 4.85%.
The takeaways:
“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” said Freddie Mac Chief Economist Sam Khater. “As rates remain high and supply of unsold homes woefully low, incoming data shows that existing-home sales continue to fall. However, there are slightly more new homes available, and sales of these new homes continue to rise, helping provide modest relief to the unyielding housing inventory predicament.”
Realtor.com Chief Economist Danielle Hale commented:
“The Freddie Mac fixed rate for a 30-year mortgage jumped again this week, climbing 14 basis points to 7.23%, hitting a new multi-decade high (highest since 2001),” said realtor.com® Chief Economist Danielle Hale. “Recent housing data have been mixed. While existing-home sales dipped in July, new-home sales and construction both picked up in the same period. But for these July new- and existing-home sales, financing terms were likely locked in June or July, when mortgage rates were only in the mid-6% range. As rates have surged past 7% and home buying costs have risen yet again, home purchase mortgage applications have eased, suggesting that at least some potential buyers have been shut out of the market. Furthermore, as rents notch a third month of decline, hopeful first-time homebuyers may have more reasons to take their time or extend their lease, rather than rushing in a challenging and expensive market.
“Recent inflation data have improved in line with broad economic expectations, but the labor market and other indicators have suggested that a fair amount of momentum remains. This leaves the door open for a healthy debate about the right move at the next FOMC meeting after the Fed’s July meeting rate hike. My expectation, which mirrors the market’s, is that the Fed will hold rates steady in September. The more open question is whether additional hikes are in store as we near the end of the year. Investors will be listening for any clues on a shift in Chair Powell’s outlook during his Jackson Hole address on Friday. I expect him to remain committed to data-dependency at this stage of the cycle, which will mean more near-term uncertainty for interest rates ahead.
“Interest rate uncertainty paired with still-high costs and new shifts in the way we work have led to an interesting split in the housing market. While affordability continues to be a top consideration for many home shoppers, the realtor.com® 2023 Hottest Zip Codes report shows that another type of home shopper has also been active in 2023. Areas with high-quality housing in close proximity to major job centers have joined affordable markets on the list of Hottest Zip Codes, suggesting that in-office demands are causing some shoppers to focus on commute length.”
