A year ago at this time, the 30-year fixed-rate mortgage averaged 3.89 percent. This past week, the average registered 4.54 percent, according to Freddie Mac.
Despite surging mortgage rates over the past year — rates hit their highest point in seven years last month — home sales are healthy overall and home prices continue their upward momentum.
So why is the housing market still not feeling the impact on higher rates? For one, rising interest rates actually draw more buyers, especially first-time homebuyers, into the market who hope to “lock in” the current best mortgage rates before either home prices or interest rates keep going up, experts say.
The Mortgage Bankers Associations’s survey for the week ending June 1, 2018 found that mortgage applications increased 4.1 percent from one week earlier. The group’s Refinance Index increased 4 percent from the previous week.
However, home sales in some areas are hitting other roadblocks. In many markets, demand is running up against low supplies of homes for sale.
“While the very healthy job market continues to fuel interest in buying a home, the supply shortages in most markets are pushing prices higher and currently keeping sales at a standstill,” Sam Khater, Freddie Mac’s chief economist. “Listings for new and existing homes need to increase in the months ahead to moderate price growth and reignite sales activity.”
Here is Freddie Mac’s rundown of average mortgage rates:
- 30-year fixed-rate mortgage (FRM) averaged 4.54 percent, with an average 0.5 point for the week ending June 7, 2018, down from last week when it averaged 4.56 percent. A year ago at this time, the 30-year FRM averaged 3.89 percent.
- 15-year FRM this week averaged 4.01 percent, with an average 0.4 point, down from last week when it averaged 4.06 percent. A year ago at this time, the 15-year FRM averaged 3.16 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.74 percent this week, with an average 0.4 point, down from last week when it averaged 3.80 percent. A year ago at this time, the 5-year ARM averaged 3.11 percent.