Rates Up For Fifth Week Straight

Average mortgage rates increased for a fifth consecutive week just as spring buying season entered its peak months.

Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.22%, up from the week prior’s 7.17%. A year ago at this time, the 30-year FRM averaged 6.39%.

The 15-year fixed rate increased from 6.44% to 6.47%. A year ago, it averaged 5.76%. 

“On average, more than one-third of home sales for the entire year occur between March and June. With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon,” said Sam Khater, Freddie Mac’s Chief Economist.

Home sellers enjoy the biggest premiums in May as buyers take advantage of warmer weather and the end of the school year. June is also typically a busy month for sales.

But the Central Bank declined to cut rates at its latest meeting and gave no hints as to when that might occur. Rates are likely to stay “higher for longer,” keeping homeownership out of reach for many Americans.

This is especially true for equity-less first-time buyers who are struggling to save for down payments as home prices soar.

“With house prices having gone up, and now with much higher interest and mortgage rates, it’s almost impossible for first-time buyers,” Treasury Secretary Janet Yellen commented during testimony before the House Ways and Means Committee.

Khater noted that other indicators point to a more optimistic view of the spring season, however. Pending home sales did improve in March, a sign that some buyers are adapting to high rates.

But NAR Chief Economist Lawrence Yun said that while pending sales fared decently last month, the data “remain in a fairly narrow range over the last 12 months without a measurable breakout.”

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