Mortgage Rates Hold Steady Above 5%

Mortgage Weekly Update

Mortgage rates technically dropped this week, but only by a single basis point. According to Freddie Mac, the average rate on 30-year, fixed-rate loans is now 5.1% — down from 5.11% the week prior but nearly 200 basis points over early January’s rates. 

The higher rates are trickling down to mortgage activity. The latest index from the Mortgage Bankers Association shows that overall mortgage applications are down 8.3% from a year ago. Purchase loan activity is down 7% for the week and has fallen 17% compared to a year ago.

“The combination of swift home price growth and the fastest mortgage rate increase in over 40 years is finally affecting purchase demand,” said Sam Khater, Freddie Mac’s chief economist. “Homebuyers navigating the current environment are coping in a variety of ways, including switching to adjustable-rate mortgages, moving away from expensive coastal cities, and looking to more affordable suburbs. We expect the decline in demand to soften home price growth to a more sustainable pace later this year.”

Refinance applications dropped the most, falling 9% for the week and 71% over the year. They now account for barely a third of all mortgage applications.

“With mortgage rates increasing last week to the highest level since 2009, applications continued to decline,” said Joel Kan, MBA’s associate vice [resident of economic and industry forecasting. “Overall application activity fell to the lowest level since 2018, with both purchase and refinance applications posting declines.”

More in mortgage & housing news

  • According to MBA, median mortgage payments jumped 5% in March, rising from $1,653 to $1,736. The typical borrower’s payment was $387 higher than it was a year ago.
  • It’s good news for inventory. According to Realtor.com new listings were up 4% last week compared to the year prior. Total active inventory was down 6% — a big improvement over recent months. Economist Danielle Hale noted, “We expect active inventory to surpass year-ago levels in the next few months.”
  • FEMA flood insurance policies are about to get more expensive. According to a Redfin analysis, 81% of policyholders are seeing costs increase, with the biggest jumps in Texas, Mississippi, and Florida. In these three states, 90% of policyholders can expect an increase in premiums.

This week in mortgage interest rates

Mortgage interest rates held steady on 30-year loans and increased slightly on 15-year mortgages and 5/1 ARMs. Here’s how average rates broke down by loan type:

Check back next week for the most up-to-date mortgage and housing news.

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By Aly Yale / April 28th, 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.