Mortgage Rates Take a Breather After Nearly Doubling in One Year’s Time
The 30-year fixed-rate mortgage averaged 5.7% for the week ending June 30, according to data released by Freddie Mac on Thursday. That’s down 11 basis points from the previous week—one basis point is equal to one one-hundredth of a percentage point, or 1% of 1%.
The average rate on the 15-year fixed-rate mortgage fell 9 basis points over the past week to 4.83%. On the other hand, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.5%, up 9 basis points from the prior week.
“The rapid rise in mortgage rates has finally paused,” Sam Khater, chief economist at Freddie Mac, said in a press release, “largely due to the countervailing forces of high inflation and the increasing possibility of an economic recession.”
The pause should help the housing market “rebalance” and aid buyers, he added, by slowing the “breakneck growth of a seller’s market to a more normal pace of home price appreciation.”
The 30-year rate was 2.98% at the same time last year.
Higher mortgage rates are pushing would-be buyers to wait to buy homes, as the cost of borrowing rises. For an existing home priced at the median of $407,600, with a 10% down payment and a 30-year fixed-rate mortgage, the increase in borrowing costs since last year would be roughly $590, according to a calculator from Bankrate.
Mortgage applications, a sign of demand, rose slightly for the week ending June 24, according to the Mortgage Bankers Association, driven by refinances of conventional loans.