Rates Rise To 4.42%

Mortgage rates continued their upward march this week, averaging 4.42%, Freddie Mac reported Thursday.

Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 4.42%. A year ago at this time, the 30-year FRM averaged 3.17%.

“This week, the 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up,” said Sam Khater, Freddie Mac’s Chief Economist.

“Rising inflation, escalating geopolitical uncertainty, and the Federal Reserve’s actions are driving rates higher and weakening consumers’ purchasing power. In short, the rise in mortgage rates, combined with continued house price appreciation, is increasing monthly mortgage payments and quickly affecting homebuyers’ ability to keep up with the market.”

According to Fannie Mae’s Economic and Strategic Research (ESR) Group, the task of enacting a “soft landing” – that is, raising rates to combat inflation without precipitating economic contraction – has been further complicated by Russia’s invasion of Ukraine.

Despite the substantial uncertainty, the ESR Group continues to expect the Federal Reserve to raise the federal funds rate five times in 2022 and eight times total through 2023, according to a press release.

“A slowing economy, decades-high inflation, expired fiscal stimulus, tightening monetary policy, and now Russia’s invasion of Ukraine are all weighing on the health of the US economy,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.

Mortgage loan applications and new home sales both declined last month as these elements take their toll on American house hunters.

Additional findings from Thursday’s report:

  • 15-year fixed-rate mortgage averaged 3.63% with an average 0.8 point.
  • A year ago at this time, the 15-year FRM averaged 2.45%.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36% with an average 0.3 point.
  • A year ago at this time, the 5-year ARM averaged 2.84%.