Mortgage Rates Near 4% for First Time Since 2019

Mortgage Weekly Update

Mortgage rates have officially hit their highest point since mid-2019 and are now nearing 4%. According to Freddie Mac, the average rate on 30-year loans this week is 3.92% — up from 3.69% last week and 2.81% a year ago.

“Mortgage rates jumped again due to high inflation and stronger-than-expected consumer spending,” said Sam Khater, Freddie Mac’s chief economist. “As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets.”

The jump sent mortgage activity downward. According to the Mortgage Bankers Association, overall mortgage applications fell 5.4% compared to last week, while purchase loan applications dropped 1%.

“​​Purchase applications saw a modest decline over the week, with government purchase applications accounting for most of the decrease,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Prospective buyers still face elevated sales prices in addition to higher mortgage rates. The heavier mix of conventional applications again contributed to another record average loan size at $453,000.” 

Refinances dipped much more, falling 9% over the week. They’re now down 54% below last year’s levels.

“Consistent with this period of higher mortgage rates, refinance applications fell 9% last week and stood at around half of last year’s pace,” Kan said. “The refinance share of applications was also at its lowest level since July 2019.”

More in mortgage & housing news

  • Home prices are up 12.8% compared to last year, according to a new report from Realtor.com. Active inventory is down 26%.
  • Zillow released its January 2022 to January 2023 home value forecast, and the numbers are pretty shocking. The company expects home value growth to clock in at 21.6% by spring and then slow to 17.3% by January next year.
  • Over 18% of all homes purchased in Q4 2021 were bought by investors — a record high, according to Redfin. Investors purchased 80,000 homes in that time period.

This week in mortgage interest rates

Interest rates rose on all loan products this week. The average 30-year rate is now nearly 4%.

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

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By Aly Yale / February 17th, 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.