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.
The average 30-year-fixed rate mortgage climbed to 3.09% during the week ending Oct. 21, rising from 3.05% the week prior, according to the latest Freddie Mac PMMS Mortgage Survey.
Sam Khater, Freddie Mac’s chief economist, said in a statement “Mortgage rates continued to rise this week due to the trajectory of both the economy and the pandemic.”
A year ago, the 30-year fixed-rate mortgage averaged 2.80%. Most economists believe they’ll continue to climb. Rising mortgage rates and paltry inventory will make things harder for homebuyers as well.
“Even as the availability of existing homes is improving, prices remain high due to homebuyer demand and limitations on housing starts and permits resulting from the ongoing labor and material shortages,” Khater said. “Despite these countervailing forces, we expect the housing market to remain strong as we head into the end of the year.”
Mortgage application activity dropped 6.3% for the week ending Oct. 15, according to the latest Mortgage Bankers Association survey. And, as you might have guessed, mortgage rates had a lot to do with it.
“The 30-year fixed rate has increased 20 basis points over the past month and reached 3.23% last week – the highest since April 2021. The 15-year fixed rate increased to 2.54%, which is the highest since July,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting.
According to Kan, “insufficient housing supply and elevated home-price growth” are limiting options for prospective buyers.
Mortgage rates hit highest level since April, rising to 3.05% for the week ending Oct. 14.
Two weeks ago, rates rose 13 basis points to 3.01%, eclipsing the 3% mark for the first time since June. However, last week, rates fell to 2.99%.
Sam Khater, Freddie Mac’s chief economist, said in a statement that “as inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing.”
Although rates remain at historic lows for now, market observers do expect rates to climb upward, eventually. Even a modest increase in rates could deter borrowers from seeking to refinance their mortgages.
Mortgage application activity was largely flat for the week ending Oct. 8. However, applications overall increased just 0.2% from the prior week.
According to Joel Kan, the MBA’s vice president of economic and industry forecasting, “an increase in home purchase applications offset a slight decline in refinances.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18% from 3.14%.
“Government refinance applications fell over 3% last week, driven by a decline in FHA refinances and an eight-basis-point increase in the average FHA mortgage rate,” said Kan. “We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive.”
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