Mortgage rates rose slightly over the last week, up from an average of 3.10% to 3.12%, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.12%, rising slightly after a weeks-long pattern of hovering around 3.10% or 3.11%. A year ago at this time, the 30-year FRM averaged 2.67%.
“Mortgage rates inched up as a result of economic improvement and a shift in monetary policy guidance,” said Sam Khater, Freddie Mac’s Chief Economist.
“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.”
The Federal Open Market Committee (FOMC) announced it will double the pace of tapering its pandemic asset purchase program after its meeting this week, and signaled it would likely raise interest rates next year. This would be its first rate hike since March 2020.
Some analysts have suggested that rising rates may help moderate sky-high home prices. But Erin Lantz, vice president of mortgages at Zillow, noted that increases might not lead to less demand.
“While those looking to buy a home are understandably concerned about the path of rates ahead, it’s important to remember that borrowing costs remain exceptionally low by historical standards,” she told CNBC.
“Rising rates may impact the location or size of the home they hope to purchase, but buyers that are fully committed to buying a home are unlikely to be swayed by the FOMC’s decision to raise rates.”
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 2.34% with an average 0.7 point.
- A year ago at this time, the 15-year FRM averaged 2.21%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.45% with an average 0.3 point, unchanged from last week.
- A year ago at this time, the 5-year ARM averaged 2.79%.