Rates fluctuate again due to slowing economic growth.
The 30-year fixed mortgage rate averaged 5.51%, continuing its rapid ascent after two consecutive weeks of decline.
Freddie Mac’s Primary Mortgage Market Survey showed that the average 30-year fixed-rate mortgage jumped 21 basis points to 5.51% week over week and up from 2.88% at this time in 2021. The benchmark rate experienced its largest weekly drop in 14 years last week when it plunged by over half a percentage point from the record high in June.
The 15-year fixed-rate mortgage climbed to 4.67% from 4.45% last week. It has also increased by more than double last year’s level of 2.22%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage posted a 16-basis-point decline from the previous week, down to 4.35%. A year ago, the five-year ARM averaged 2.47%.
“Mortgage rates are volatile as economic growth slows due to fiscal and monetary drags,” said Freddie Mac chief economist Sam Khater. “With rates the highest in over a decade, home prices at escalated levels, and inflation continuing to impact consumers, affordability remains the main obstacle to homeownership for many Americans.”
Home prices surged to their second highest level in the second quarter, according to Fannie Mae. The annual price growth of single-family homes is running at a 19.4% pace, up 4.3% from the previous quarter.
Meanwhile, the Mortgage Bankers Association expects refinance loan applications to remain depressed due to rising mortgage rates. Overall, mortgage application activity was down 1.7% week over week.