Mortgage interest rates are currently as high as they have been in seven years, according to Freddie Mac’s latest Primary Mortgage Market Survey. This comes despite mortgage interest rates falling in previous weeks. In fact, rates reversed course and are the highest level seen since 2011.
As for the specifics, the 30-year fixed-rate mortgage increased to 4.61% for the week ended May 17, up from 4.55% last week. The rate was at 4.02% last year.
Freddie Mac Chief Economist Sam Khater, commented:
While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.
However, there were other effects seen in the survey. The 15-year fixed-rate mortgage increased to an average 4.08% this week, up from 4.01% last week.
Also, the five-year Treasury-indexed hybrid adjustable-rate mortgage increased to an average 3.82% this week, up from 3.77% last week.
Danielle Hale, chief economist for Realtor.com, commented on the move:
Treasury rates moved above 3% this week, and mortgage rates followed suit, increasing 6 basis points to 4.61%. This move puts mortgage rates at the highest level in 7 years and is likely to spur home buyers to evaluate their shopping plans. In March, nearly four in five home shoppers reported adjusting their home search to compensate for higher mortgage rates.
Mortgage rates are expected to approach 5 percent by the end of the year, but even with higher prices and rising rates, affordability of the median home for the median family is still higher now than it was for the majority of the last decade—2000-2008. Mortgage rates could rise well above 6 percent before affordability drops below the level that prevailed then. Of course, affordability can look different for families above and below the median income.