Mortgage rates rose this week, leading to a decline in overall demand as many Americans reconsider refinancing options.
Freddie Mac’s recent Primary Mortgage Market Survey, published Thursday, revealed that the average rate for a 30-year fixed mortgage climbed to 6.72%. This is an increase from last week’s average of 6.6% and slightly higher than the 6.67% rate recorded a year ago.
Sam Khater, Freddie Mac’s chief economist, noted, “This week, mortgage rates have reached a level similar to that of this time last year. Generally, rates have fluctuated between 6 and 7 percent over the past 12 months. Homebuyers are beginning to adapt to these elevated rates and are increasingly motivated to proceed with home purchases, contributing to a rise in purchase activity.”
Additionally, the average rate for a 15-year fixed mortgage increased to 5.92%, up from 5.84% the previous week, while last year’s average stood at 5.95%.
The Mortgage Bankers Association (MBA) indicated that overall mortgage applications dropped by 0.7% on a seasonally adjusted basis compared to the previous week, largely due to the uptick in rates, which resulted in a 3% decline in refinancing applications.
In summary, while rising mortgage rates have tempered refinancing activity, they are fostering a cautious optimism among homebuyers who are adjusting to the new market realities and still willing to pursue home purchases. This trend signals resilience in the housing market, as buyers navigate the changes and continue to seek opportunities.