Mortgage rates rose last week, reversing a brief period of declines brought on by uncertainty surrounding Ukraine, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.85%. A year ago at this time, the 30-year FRM averaged 3.05%.
“Following two weeks of declines, mortgage rates rose this week as U.S. Treasury yields increased,” said Sam Khater, Freddie Mac’s Chief Economist.
“Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy. However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short-term.”
The Consumer Price Index reached another high this week, standing at 7.9% YOY. The last time the CPI was at this level was January 1982.
The Fed said that it still plans to raise rates later this month despite uncertainty surrounding the Ukraine conflict. Fed Chairman Jerome Powell said the central bank would stick to its plan to reduce its balance sheet bond holdings.
“The question now really is how the invasion of Ukraine, the ongoing war, the response from nations around the world — including sanctions — may have changed that expectation,” Powell said. “It’s too soon to say for sure, but for now I would say that we will proceed carefully along the lines of that plan.”
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 3.09% with an average 0.8 point.
- A year ago at this time, the 15-year FRM averaged 2.38%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.97% with an average 0.3 point.
- A year ago at this time, the 5-year ARM averaged 2.77%.