Mortgage rates increased again this week, averaging 5.81%, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.81%, up from last week’s 5.78%. A year ago at this time, the 30-year FRM averaged 3.02%.
“Fixed mortgage rates have increased by more than two full percentage points since the beginning of the year,” said Sam Khater, Freddie Mac’s Chief Economist.
“The combination of rising rates and high home prices is the likely driver of recent declines in existing home sales. However, in reality many potential homebuyers are still interested in purchasing a home, keeping the market competitive but leveling off the last two years of red-hot activity.”
Rising rates have priced some buyers out of the market. Last week’s record half-point jump for the 30-year fixed rate pushed the principal and interest payment of a typical home to $2,103, surpassing the 30% cost-burdened threshold for the average buyer.
But increased rates haven’t destroyed demand. Mortgage loan application volume rose last week despite rates surging to their highest point since November 2008, suggesting that many buyers are willing to overlook rates once they finally find a home amid limited inventory.
ARM activity has risen steadily, however, as consumers try to reduce the cost of purchasing a home.
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 4.92% with an average 0.9 point.
- A year ago at this time, the 15-year FRM averaged 2.34%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.41% with an average 0.3 point.
- A year ago at this time, the 5-year ARM averaged 2.53%