Mortgage Rates Average 5%

Mortgage rates averaged 5% flat last week, up from 4.72%, Freddie Mac reported Thursday.

Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5%. A year ago at this time, the 30-year FRM averaged 3.04%.

“This week, mortgage rates averaged five percent for the first time in over a decade,” said Sam Khater, Freddie Mac’s Chief Economist. 

“As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.”

Home prices continue growing despite hope for a cool down this year due to mortgage rate increases pricing many out of the market and reducing competition.

For new construction, however, prices may stay high as inflation jacks up production costs. Construction input prices rose 2.9% in March and are up 24.4% YOY and 39.1% from February 2020, according to an Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index.

“Consumers are right to complain about inflation, which has been north of 8% during the past year,” said ABC Chief Economist Anirban Basu. “But America’s contractors have experienced materials price inflation nearly three times that during the same period. For now, there are few signs of relief.”

Additional findings from Thursday’s report:

  • 15-year fixed-rate mortgage averaged 4.17% with an average 0.9 point.
  • A year ago at this time, the 15-year FRM averaged 2.35%.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.69% with an average 0.3 point.
  • A year ago at this time, the 5-year ARM averaged 2.80%.