For the week ending February 17, the average 30-year fixed-rate mortgage rose 23 basis points to 3.92%, up from 3.91% the previous week. According to the most recent Freddie Mac PMMS Mortgage Survey, this is the highest level of mortgage rate since May 2019, even though the 30-year fixed-rate mortgage averaged 2.81% a year ago. The PMMS study focuses on conventional, conforming, fully amortizing home purchase loans for borrowers with great credit and a 20% down payment. According to a statement by Sam Khater, Freddie Mac’s Chief Economist, mortgage rates have risen once more due to high inflation and stronger-than-expected consumer expenditure.
Mortgage rates are normally linked to the 10-year Treasury yield, which hit 2.03% on February 16, up from 1.94% the week before. In the preceding week, the 15-year fixed-rate mortgage averaged 3.15%, up from 2.93% the week before that. It was 2.21% a year ago at this time. Economists projected that rates would rise in 2022 as the economy steadied but would remain near record lows. Rates, on the other hand, increased faster than planned. According to the Mortgage Bankers Association (MBA), 30-year mortgage rates will hit 4% by the end of 2022.
According to Joel Kan, MBA’s assistant vice president of economic and industry forecasts, mortgage rates will almost probably rise if current conditions continue. However, rates may quickly reverse if something else rocks the boat, such as an armed war between Russia and Ukraine, an emerging COVID version, or a dramatic change in commodity prices.
To read more about the rising mortgage rates and their impacts, click here.
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