Mortgage rates experienced an uptick this week, leading to a decrease in overall demand, as many Americans hesitate to pursue refinancing options. According to Freddie Mac’s latest Primary Mortgage Market Survey released on Thursday, the average rate for a 30-year fixed mortgage rose to 6.72%, up from last week’s figure of 6.6%. Comparatively, the average rate for a 30-year loan stood at 6.67% one year ago.
Sam Khater, chief economist at Freddie Mac, commented, “Mortgage rates crept up to a similar average as this time in 2023. For the most part, these rates have fluctuated between 6 and 7 percent over the past year. Homebuyers are slowly adapting to these elevated rates and are becoming more willing to proceed with home purchases, which has led to a rise in purchase activity.”
In addition, the average rate for a 15-year fixed mortgage also increased to 5.92% from 5.84% the previous week, while standing at 5.95% one year ago.
The Mortgage Bankers Association (MBA) reported on Wednesday that there was a 0.7% decrease in mortgage applications on a seasonally adjusted basis from the prior week, largely due to the rising rates, which caused a notable 3% drop in refinancing applications.
In summary, rising mortgage rates are impacting the housing market, with many potential refinancers opting to hold off at this time. However, there is a silver lining as homebuyers are beginning to accept the new normal of higher rates, indicating resilience and a steady interest in purchasing homes. This gradual increase in purchasing activity could contribute positively to market stability in the long run.