Mortgage rates hit their highest point in almost 14 years last week, up from 5.66% to 5.89%, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.89%.
A year ago at this time, the 30-year FRM averaged 2.88%.
“Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy due to elevated inflation,” said Sam Khater, Freddie Mac’s Chief Economist.
“Not only are mortgage rates rising but the dispersion of rates has increased, suggesting that borrowers can meaningfully benefit from shopping around for a better rate. Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one additional rate quote and an average of about $3,000 if they get five quotes.”
As rates rise, buyers are taking a step back from the market, bringing price growth and bidding wars down from record highs. Black Knight’s Home Price Index recently posted a drop in home prices for the first time in 32 months.
But the correction to a “balanced” market is only just beginning, and will probably take a while.
“It’s a particularly bad time to buy right now,” Mark Zandi, chief economist for Moody’s Analytics, told Bloomberg.
“If I were a buyer, I’d be waiting. Affordability has been crushed, demand is weakening rapidly, and listings are rising. I expect house prices to go flat in some of the most active markets and for some to come down.”
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 5.16% with an average 0.8 point.
- A year ago at this time, the 15-year FRM averaged 2.19%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.64%, with an average 0.4 point.
- A year ago at this time, the 5-year ARM averaged 2.42%.