Mortgage Rates Climb Higher than 4%
The 30-year, fixed-rate mortgage averaged 4.16% this week, a height not seen since May 2019. Last week it averaged 3.85%; a year ago, it was 3.09%.
MCLEAN, Va. – Mortgage rates veered higher this week, with a 30-year, fixed-rate loan averaging 4.16%, notably higher than last week’s 3.85%. This week’s rate broke the psychologically important four-percent barrier and ended at almost a three-year high, according to Freddie Mac’s weekly survey of rates.
“The 30-year fixed-rate mortgage exceeded 4% for the first time since May of 2019,” says Sam Khater, Freddie Mac’s chief economist. “The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”
However, Khater does not predict a slowdown in the housing market.
“While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season,” Khater says.
The Federal Reserve Board increased its benchmark short-term interest rates earlier in the week, and while those don’t have a direct impact on long-term bonds – generally used to finance mortgage loans – rate changes often have an indirect impact that sends mortgage rates higher. In addition to the modest quarter-point rate increase, the Fed suggested it would increase interest rates as much as seven times this year as it tries to fight inflation.
Average mortgage rates, week of March 17, 2022
- The 30-year fixed-rate mortgage averaged 4.16% with an average 0.8 point, up from last week’s 3.85%. A year ago, the 30-year FRM averaged 3.09%.
- The 15-year fixed-rate mortgage averaged 3.39% with an average 0.8 point, up from last week’s 3.09%. A year ago, the 15-year FRM averaged 2.40%.
- The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.19% with an average 0.2 point, up from last week’s 2.97%. A year ago, the 5-year ARM averaged 2.79%.
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