Average Mortgage Rate Hits Highest Point Since May 2020

Mortgage Weekly Update

The average mortgage rate jumped 11 basis points this week, according to Freddie Mac, clocking in at 3.22% on 30-year, fixed-rate loans. That’s up from just 3.11% the week prior and the highest rate since in 19 months.

Buyers and homeowners responded to the mortgage rate increase with notable drops in both purchase and refinance activity. According to the Mortgage Bankers Association, overall mortgage applications fell 2.7% for the week, with purchase applications dropping 32% over the last two weeks. It was the slowest week for purchase activity since October.

Refinances also decreased over the two weeks prior, dropping 2%. They’re now down 40% compared to last year.

“Mortgage rates continued to creep higher over the past two weeks, as markets maintained an optimistic view of the economy,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Refinance demand continues to dwindle, as many borrowers refinanced in 2020, and in early 2021 — when mortgage rates were around 40 basis points lower.”

More in mortgage & housing news

  • Zillow is predicting that Tampa, Florida, will be the hottest housing market of the year in 2022. The city is expected to see the highest home price growth in the nation. Other cities to top Zillow’s list were nearby Jacksonville and Orlando; Raleigh and Charlotte, North Carolina; Phoenix; Nashville; Atlanta; and San Antonio and Austin, Texas.
  • According to the latest 2021 Home Affordability Report from ATTOM Data Solutions, the median-priced single-family home was less affordable than historical averages in 77% of the nation’s counties last quarter. That’s up from just 39% the year prior and the highest share of unaffordability in 13 years.
  • The most recent CoreLogic Home Price Index Report shows home prices rose the most on homes in the lowest price tier in November, with a nearly 20% bump over the year. They also jumped significantly in Arizona (over 28%) and Florida (nearly 26%).

This week in interest rates

Rates dropped on 30- and 15-year mortgage products this week, while the average mortgage rate on 5/1 ARMs held steady. Here’s how rates looked for each loan type:

Make sure to check back here next week for the latest mortgage rates and news.

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By Aly Yale / January 6th, 2022 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.