Mortgage rates moved up to their highest level since May 5, 2011, to touch 4.66 percent during the week according to the latest Freddie Mac Primary Mortgage Market Survey released on Thursday. While the 30-year fixed-rate mortgage was up from 4.61 percent last week, the 15-year fixed-rate mortgage also moved up from 4.08 percent to 4.15 percent during the week. The 30 and 15-year rates were at 3.95 percent and 3.07 percent respectively during the same period last year.
"Mortgage rates so far in 2018 have had the most sustained increase to start the year in over 40 years," said Sam Khater, Chief Economist at Freddie Mac. "Through May, rates have risen in 15 out of the first 21 weeks which is the highest share since Freddie Mac began tracking data for a full year in 1972.
The 5-year adjustable-rate mortgage also saw an uptick during the week rising from 3.82 percent last week to 3.87 percent. The rate during the same period last year was 3.07 percent.
While rising monthly mortgage payments are likely to give a scare to homebuyers, Khater said that it could also lead some would-be sellers to stay put in their home. "At a time when housing inventory remains extremely low, it’s worth watching whether these higher borrowing costs lead some would-be sellers to stay put in their current home," Khater said. "Inventory shortages would likely worsen if more homeowners decide not to sell out of reluctance of having a new mortgage with a higher rate.”
According to Danielle Hale, Chief Economist at Realtor.com, "As home prices and mortgage rates rise, would-be buyers may get tripped up by rising monthly mortgage payments. The loosening of some lending restrictions that are part of the Dodd-Frank reform package signed by the President will help open credit availability to some buyers, but all buyers would benefit from slower home price growth."