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Numbers released this morning show mortgage rates continue their steady ascent. The Freddie Mac Primary Mortgage Market Survey puts the 30-year fixed-rate mortgage at 5.3%.
The rate was 5.27% last week and 2.94% a year ago.
Freddie Mac’s chief economist says the higher rates have created a one-third increase in monthly payments. He expects demand among first-time homebuyers to weaken.
“Homebuyers continue to show resilience even though rising mortgage rates are causing monthly payments to increase by about one-third as compared to a year ago,” Sam Khater, Freddie Mac’s chief economist, said. “Several factors are contributing to this dynamic, including the large wave of first-time homebuyers looking to realize the dream of homeownership. In the months ahead, we expect monetary policy and inflation to discourage many consumers, weakening purchase demand and decelerating home price growth.”
The Mortgage Bankers Association said yesterday the higher rates aren’t dampening enthusiasm recently. For the second straight week, MBA said mortgage applications rose despite what it says is an average 30-year fixed rate of 5.53%.
The Freddie Mac survey shows:
- 30-year fixed-rate mortgage averaged 5.3% with an average 0.9 point as of May 12, 2022, up from last week when it averaged 5.27%. A year ago at this time, the 30-year fixed-rate averaged 2.94%.
- 15-year fixed-rate mortgage averaged 4.48% with an average 0.9 point, down from last week when it averaged 4.52%. A year ago at this time, the 15-year fixed-rate averaged 2.26%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.98% with an average 0.3 point, up from last week when it averaged 3.96%. A year ago at this time, the 5-year ARM averaged 2.59%.
According to Freddie Mac, the weekly survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Borrowers may still pay closing costs which are not included in the survey.