Increase in rates has started to impact activity, says Freddie Mac chief economist
Mortgage rates soared higher again this week in Freddie Mac’s weekly Primary Mortgage Market Survey.
The fixed 30-year mortgage rate was up five basis points from last week to 4.72% for the week ending April 07. It is also more than a percentage point higher than this time a year ago when it averaged 3.13%.
Federal Reserve officials recently announced that they will start reducing its mortgage and treasury bonds sometime in the next couple of months. Notes from the FOMC meeting on Thursday also signal that the Fed is raising interest rates by a quarter-point – and possibly by a half-point – to counter the 40-year high inflation.
“Mortgage rates have increased 1.5 percentage points over the last three months alone, the fastest three-month rise since May of 1994,” Freddie Mac chief economist Sam Khater said. “The increase in mortgage rates has softened purchase activity such that the monthly payment for those looking to buy a home has risen by at least 20% from a year ago.”
The 15-year fixed-rate mortgage posted an eight-basis-point week-over-week increase, up to 3.91%. Last year, the 15-year FRM was 2.42%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage rose from 3.50% the previous week to 3.56%. A year ago, the five-year ARM averaged 2.92%.