Average Rates Breach 7%, Highest Since 2002

It’s finally happened: average mortgage rates topped 7% for the first time in 20 years, after hovering just under it for several weeks, Freddie Mac reported Thursday.

Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 7.08%, up from 6.94% the week prior.

A year ago at this time, the 30-year FRM averaged 3.14%.

“The 30-year fixed-rate mortgage broke 7% for the first time since April 2002, leading to greater stagnation in the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. 

“As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”

As buyers flee the market, home prices are decelerating at a record pace and affordability is worsening day by day.

But for those still keeping an eye on the market, even tepid home shoppers can be tempted into a deal.

“Every set of market conditions comes with its own tradeoffs,” Sacramento Redfin real estate agent Michael Cendejas said.

“While mortgage rates are much higher now, buyers have the opportunity to negotiate. We’ve gotten sellers to agree to a lower price and to provide a credit, which enables the buyer to buy down their mortgage rate to below 6%.”

Additional findings from Thursday’s report:

  • 15-year fixed-rate mortgage averaged 6.36% with an average 1.4 point.
  • A year ago at this time, the 15-year FRM averaged 2.37%.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.71%, dropping from last week’s 5.96%, with an average 0.3 point.
  • A year ago at this time, the 5-year ARM averaged 2.56%.

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