HousingWire’s Mortgage Rates Center with current rates and news

Keep up with current rates and related news at HousingWire’s Mortgage Rates Center. Rates are updated twice weekly based on data from the Mortgage Bankers Association (MBA) and Freddie Mac‘s Primary Mortgage Market Survey (PMMS). Freddie Mac’s PMMS only covers purchase mortgages. In addition, the PMMS looks at rates from the first three days of the week from lender websites, while the MBA survey covers the rates on apps collected over the prior full week.

PMMS 1/20/2022

The average 30-year-fixed rate mortgage climbed to 3.56% during the week ending Jan. 20, rising from 3.45% the week prior. Most economists believe they’ll continue to climb in the weeks and months ahead.

“Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” Sam Khater, Freddie Mac’s chief economist, said in a statement.

The Federal Reserve announced in December that it is accelerating its tapering of bond-purchases starting in January. It is reducing the pace of its monthly purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. In November, the Fed started with a reduction of $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities.

The rise in mortgage rates moved in concert with the 10-year Treasury yield, which reached 1.83% yesterday, compared to 1.67% in the previous Wednesday.

MBA 1/19/2022

Mortgage applications increased 2.3% from the previous week, largely due to a strong purchase market. The seasonally adjusted Purchase Index rose 7.9% from the previous week, while the Refinance Index decreased 3.1% in the same period. Compared to the same week one year ago, mortgage apps overall dropped 37.3%, with a sharp decline in refinance (-49.2%) compared to purchase (-12.2%).

According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, the 30-year fixed rate reached 3.64%, rising more than 30 basis points over the past two weeks. Higher rates led to the “slowest pace of refinance activity in over two years,” mainly among FHA and VA loans, Kan said in a statement.

Regarding purchase applications, the average loan size set a record at $418,500. “The continued rise in purchase loan application sizes is driven by high home price appreciation and the lack of housing inventory on the market – especially for entry-level homes,” Kan said.

The economist added that government purchase applications had slower growth, contributing to the larger loan balances and suggesting that prospective first-time buyers are struggling to find homes to buy in their price range.

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PMMS 1/13/2022

The average 30-year fixed rate mortgage increased to 3.45% during the week ending Jan. 13, up from 3.22% the week prior. This is the third week of mortgage rate increases, after the 30-year fixed rate fell to 3.05% on Dec. 23 amid fears of the Omicron variant.

Rates rose across all mortgage loan types, according to Sam Khater, Freddie Mac’s chief economist. Driving the increase is the expectation of a faster than expected tightening of monetary policy in response to continued inflation caused by disruptions in labor and supply chains.

“The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future,” Khater said.

MBA 1/12/2022

Mortgage applications climbed 1.4% for the week ending Jan. 7, 2022. The growth was buoyed by a 2% increase in the trade group’s seasonally adjusted purchase index. On the refinance front, the trade group’s refi index dipped by 0.1% from the previous week, coming in 50% lower than the same week one year ago.

Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a statement that the increase in mortgage rates is curtailing refinance activity.

“Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s signaling of tighter policy ahead pushed U.S. Treasury yields higher,” Kan said. “Rates at these levels are quickly closing the door on refinance opportunities for many borrowers.”

As evidence, the report found that the refi share of mortgage activity fell to 64.1 % of total applications from 65.4% the previous week. The trade group noted that refi applications are at their lowest level in over a month, while conventional refi applications were at their lowest level since January 2020.

PMMS 1/6/2022

The average 30-year fixed rate mortgage increased to 3.22% during the week ending Jan. 6, up from 3.11% the week prior. This is the second week of mortgage rate increases, after the 30-year fixed rate fell to 3.05% on Dec. 23 amid fears of the Omicron variant.

“Mortgage rate increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” Sam Khater, Freddie Mac’s chief economist said in a statement. “With higher inflation, promising economic growth and a tight labor market, we expect rates will continue to rise. The impact of higher rates on purchase demand remains modest so far give the current first-time homebuyer growth.”

MBA 1/5/2022

Mortgage applications decreased 2.7% from two weeks earlier. The results include adjustments to account for the holidays. The holiday adjusted Refinance Index decreased 2% from two weeks ago and was 40% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4% from two weeks earlier.

“Mortgage rates continued to creep higher over the past two weeks, as markets maintained an optimistic view of the economy,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

The 30-year fixed rate increased 6 basis points to 3.33%, the highest since April 2021, which drove a decrease in refinance activity, Kan said.

PMMS 12/23/2021

The average 30-year-fixed rate mortgage dropped to 3.05% during the week ending Dec. 23, after achieving 3.12% the week prior. A year ago, the 30-year fixed-rate mortgage averaged 2.66%.

Sam Khater, Freddie Mac’s chief economist, said in a statement that the COVID-19 Omicron variant is causing market volatility. Despite the decrease in rates last week, the expectation is that rates will increase in 2022.

“As the year comes to a close, the housing market is proceeding steadily. However, rates are expected to increase in 2022, which will impact homebuyer demand as well as refinance activity.”

MBA 12/22/2021

Mortgage applications fell 0.6% for the week ending Dec. 17, with fewer borrowers looking for purchases in the lower end of the market. The decrease was driven by the purchases index falling 3.3% from the previous week on a seasonally adjusted basis. Concurrently, the refi index increased 2.2% from the week prior. 

Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement that the average purchase loan increased to $416,200. That marks the second-highest amount ever, indicating more activity in the higher end of the market. 

He added, “Home-price appreciation growth remains faster than historical averages, and inventory, particularly for starter homes, continues to trail strong demand.”

PMMS 12/16/2021

The average 30-year-fixed rate mortgage increased to 3.12% during the week ending Dec. 16, up from 3.10% the week prior. Sam Khater, Freddie Mac’s chief economist, said in a statement that while house price growth is slowing, prices remain high due to solid housing demand and low supply. “We expect rates to continue to increase into 2022, which may leave some potential homebuyers with less room in their budgets on the sideline.”   

According to Khater, the 30-year-fixed mortgage rate inched up due to economic improvement and a shift in monetary policy guidance. The Federal Reserve announced on Wednesday it is accelerating the tapering program initiated in November “in light of inflation developments and the further improvement in the labor market.” Beginning in January, it will reduce the pace of its monthly purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities.

The central bank sees progress on vaccinations and strong policy support, solid job gains, and improvements in sectors most affected by the pandemic. But supply and demand imbalances and the reopening of the economy have continued to contribute to elevated inflation levels. 

MBA 12/15/2021

Mortgage applications fell 4% for the week ending Dec. 10, large part because fewer borrowers are looking to refi their exiting mortgages. The decrease was mainly driven by the refi index falling 6.4% from the previous week on a seasonally adjusted basis. Concurrently, the purchase index increased 0.7% from the week prior.

Compared to a year ago, mortgage applications declined across the board. The overall market composite index dipped 30.9% on a seasonally adjusted basis. Refi apps fell 41.4% year over year, and purchase applications decreased 10.3% in the same period.

“Fewer homeowners have a strong incentive to refinance at current rates,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement.

PMMS 12/9/2021

Mortgage rates decreased one basis point to 3.10% in the week ending Dec. 9, remaining low and stable despite tighter housing supply and affordability. Sam Khater, Freddie Mac’s chief economist, said in a statement that rates have moved sideways over the last several weeks, fluctuating within a narrow range.

“Going forward, the path that rates take will be directly impacted by more information about the Omicron variant as it is revealed and the overall trajectory of the pandemic,” Khater said. “In the meantime, rates remain low and stable, even as the nation faces declining housing affordability and low inventory.”

MBA 12/8/2021

Mortgage applications increased 2% for the week ending Dec. 3, driven by a surge in government refinancings. The increase was mainly driven by the refinance index up 9% from the previous week on a seasonally adjusted basis. Concurrently, the purchase index decreased 5% from the week prior.

“Mortgage rates declined for the first time in a month, prompting a pickup in refinancing, with government refinances increasing more than 20% over the week,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement. 

The trade group estimates the average contract 30-year fixed-rate mortgage for conforming loans ($548,250 or less) decreased to 3.30%, one basis point down from the previous week.

“Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller,” Kan said. 

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