The 30-year fixed rate mortgage (FRM) averaged 3.45% for the week of Jan. 13, down from 3.22% last week, according to Freddie Mac’s Weekly Primary Mortgage Market Survey. A year ago at the same date, the 30-year FRM averaged 2.79%.
“Mortgage rates have risen across all types of mortgages, with the 30-year fixed rate mortgage up nearly a quarter of a percent from last week,” said Sam Khater, chief economist by Freddie Mac. “This was driven by the prospect of faster than expected monetary policy tightening in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has yet to affect buying demand, but given the rapid pace of home price growth, it will likely dampen demand in the near future.
The 15-year fixed rate mortgage averaged 2.62% with an average of 0.7 points, up from last week when it averaged 2.43%. A year ago at this time, the 15-year FRM averaged 2.23%.
The 5-year Treasury-linked hybrid variable rate (ARM) mortgage averaged 2.57% averaging 0.3 points, up from last week when it averaged 0.3 points. 2.41%. A year ago at this time, the 5-year ARM averaged 3.12%.
“The impact of rising mortgage rates on the housing market is complex. Those currently looking for a home will need to reassess their finances to ensure they can still afford the price they are looking for,” says Ali Wolf , chief economist at Zonda. “As rising mortgage rates impact the monthly payment, some buyers will need to alter their price research to reflect the change. Buyers on the close will find rising interest rates the jolt of energy that they needed to start buying in earnest today.That little push could make the housing market more competitive in the near term as more buyers try to compete for limited inventory.Longer term, rising rates interest rate will weigh heavily on cost-conscious buyers, impacting affordability and reducing the chances of some becoming homeowners.”