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Mortgage Rates ‘Start Slow Climb’

Freddie Mac has released the results of its latest Primary Mortgage Market Survey (PMMS), showing 30-year fixed-rate mortgages (FRM) averaging 2.81%, with an average 0.7 point, up from last week when it averaged 2.73%, reaching its highest point this week since mid-November.

“Economic spending has improved, due to the most recent stimulus, but supply chain shortages are causing downstream inflation, leading to higher mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist. “While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3% range for the year.”

Also this week, the 15-year FRM averaged 2.21%, with an average 0.7 point, up from last week when it averaged 2.19%. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.77%, with an average 0.2 point, down from last week when it averaged 2.79%.

“Today’s Freddie Mac fixed rate for a 30-year loan increased, as positive retail sales numbers and the rebound in homebuilder sentiment buoyed bond investors, which drove up interest rates for home mortgages,” said realtor.com Senior Economist George Ratiu. “However, as mortgage rates are starting their slow climb, affordability will become front and center for homebuyers. This week’s decline in mortgage applications was an early signal that for many buyers, the steep rise in home prices and interest rates means they will have a much harder time trying to find a home within their budget. The housing market seems to be seeking more technological innovation to help power lower-priced new homes.”

About Author: Eric C. Peck

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