Mortgage Rates Hit Their Highest Point in Months
Mortgage rates hit their highest point since April this week, according to Freddie Mac. The average rate on 30-year, fixed-rate loans clocked in at 3.05% — up from 2.99% last week.
“As inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing,” said Sam Khater, chief economist for Freddie Mac.
Despite the uptick, mortgage activity held largely steady. According to the Mortgage Bankers Association, overall loan applications increased a mere 0.2% for the week. When broken down by loan type, purchase applications increased 2% over last week, while refinances fell 1%.
“Application activity changed little this week,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “An increase in home purchase applications offset a slight decline in refinances. The increase in purchase applications was welcome news, but was primarily driven by a 2% gain in conventional purchase applications, which kept the average loan size elevated.”
Refinances made up 63.9% of all mortgage activity this week, down from 64.5% a week prior. Government refinance applications fell 3% — a trend Kan says will likely continue.
“We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive,” Kan said.
More in mortgage & housing news
- Foreclosure filings jumped 24% in September alone, according to a new report from ATTOM Data Solutions. They’re now up 102% over the year.
- Overall housing affordability was up for the second month in a row in August. According to the National Association of Realtors, affordability improved 1.1% in August.
- The share of mortgage loans in forbearance fell to just 2.62% this week, according to MBA. Around 1.3 million homeowners are still on a forbearance plan.
- Mortgage credit availability increased in September. The month’s Mortgage Credit Availability Index jumped 1.5%, indicating loosening credit standards.
- According to a new report from First Street Foundation, about 14% of all residential properties are at risk of flooding, amounting to about 12.4 million homes. By 2051, that number will increase to 16% and 13.6 million homes.
This week in mortgage rates
Mortgage rates rose on all loan products this week, with the biggest jump on 15-year, fixed-rate loans.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.05% (up from 2.99%)
- 15-year, fixed-rate loans: 2.30% (up from 2.23%)
- 5/1 adjustable-rate loans: 2.55% (up from 2.52%)
Make sure to check back here next week for the latest mortgage rates and news.
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