The latest weekly Freddie Mac PMMS mortgage survey, released Thursday, showed that the average purchase mortgage rate touched 4.67%, up 25 basis points from the week prior. That was the highest reading since December 2018, according to Freddie Mac.
The GSE’s index accounts for just purchase mortgages reported by lenders over the past three days. Black Knight‘s Optimal Blue OBMMI pricing engine, which considers refis and data from the Mortgage Bankers Association, reported that rates on Wednesday averaged 4.81%, up about 10 bps from a week prior.
And several loan officers who spoke to HousingWire this week said they had clients lock rates in the 5.1% range this week, though many homebuyers with ample cash reserves are buying down mortgage points.
The central bank has signaled that it will raise interest rates another six times this year and several more in 2023 to control inflation, which reached the highest level in 40 years in February, at 7.9%.
Normally, a period of rising mortgage rates cools housing prices. But this is no normal market. The March national median listing price for active listings was $405,000, up 13.5% compared to last year and 26.5% compared to March 2020, according to Realtor.com economist Danielle Hale. In large metros, median listing prices grew by 9.1% compared to last year, on average.
Agency rates are on the rise and refinance volume is down. Originators who had their best year in 2021 will have to utilize something else to make up for this loss in 2022 and non-QM can be the answer.
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The problem, of course, is inventory. National inventory of active listings declined by 18.9% over the last year in March, while the total inventory of unsold homes — including pending listings — declined by 12.5%, according to Realtor.com. The inventory of active listings was down 62.3% compared to 2020 at the onset of the pandemic, even though demand remains high.
The latest Mortgage Bankers Association survey this week found that while interest in refi mortgages fell 15% from the prior week, interest in purchase mortgages rose a modest 0.68%.
According to the PMMS report, the average 15-year fixed-rate mortgage averaged 3.83%, up 20 bps from the prior week. (On average homebuyers paid 0.8 mortgage points.) The 5-year Treasury-indexed ARM averaged 3.50%, up from 3.36% a week prior.