Mortgage rates dropped to an average 5.13% last week from 5.22% the week prior, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.13%, following a rollercoaster couple of weeks that saw both a 30-point rate decrease and a 20-point increase.
A year ago at this time, the 30-year FRM averaged 2.86%.
“Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year,” said Sam Khater, Freddie Mac’s Chief Economist.
“The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability. As a result, over the rest of the year purchase demand likely will continue to drag, supply will modestly increase, and home price growth will decelerate.”
Purchase demand has declined sharply this year. Overall loan application volume dipped this week to its lowest level since 2000.
At the same time, prices are beginning to moderate. The median price for an existing home dropped by $10,000 from June to July, though prices are still up more than 10% from last year.
“We’re witnessing a housing recession in terms of declining home sales and home building,” NAR chief economist Lawrence Yun said.
“However, it’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 4.55% with an average 0.7 point.
- A year ago at this time, the 15-year FRM averaged 2.16%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.39%, with an average 0.3 point.
- A year ago at this time, the 5-year ARM averaged 2.43%.