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sukanya sitthikongsak - Moment
The 30-year fixed-rate mortgage barely budged this week, but it’s still stressing home shoppers feeling concern about being priced out. The 30-year fixed-rate mortgage averaged 5.10%, down slightly from 5.11% last week, Freddie Mac reports.
But it is one week before the Federal Reserve is expected to raise interest rates further, Nadia Evangelou, National Association of REALTORS® senior economist and director of forecasting, says on the association’s blog. The Fed’s key rate does not have a direct impact on mortgage rates but it does often influence them.
Borrowers may be getting nervous about how high rates could go. Higher rates already are forcing them to increase their budgets. Current buyers need to spend about $25,000 more to buy a comparable home this year than a year ago, Evangelou says.
“The combination of swift home price growth and the fastest mortgage rate increase in over 40 years is finally affecting purchase demand,” says Sam Khater, Freddie Mac’s chief economist. “Home buyers navigating the current environment are coping in a variety of ways, including switching to adjustable-rate mortgages, moving away from expensive coastal cities, and looking to more affordable suburbs. We expect the decline in demand to soften home price growth to a more sustainable pace later this year.
NAR has predicted a 10% drop in home sales for 2022.
Still, while panic continues over higher mortgages, economists note that rates remain lower than historical averages. In 2002, the average rate on a 30-year fixed-rate mortgage was about 7%, which is much higher than this week’s average of 5.10%.
Freddie Mac reports the following national averages with mortgage rates for the week ending April 28:
- 30-year fixed-rate mortgages: averaged 5.10%, with an average 0.8 point, falling from last week’s 5.11% average. Last year at this time, 30-year rates averaged 2.98%.
- 15-year fixed-rate mortgages: averaged 4.40%, with an average 0.9 point, increasing from last week’s 4.38% average. A year ago, 15-year rates averaged 2.31%.
- 5-year hybrid adjustable-rate mortgages: averaged 3.78%, with an average 0.3 point, increasing from last week’s 3.75% average. A year ago, 5-year ARMs averaged 2.64%.
Freddie Mac reports commitment rates along with average points to better reflect the total upfront costs of obtaining a mortgage.