Mortgage rates have seen an uptick this week, leading to a decrease in overall demand as many Americans reconsider refinancing options. According to Freddie Mac’s recent Primary Mortgage Market Survey, the average rate on a benchmark 30-year fixed mortgage rose to 6.72%, up from 6.6% the previous week, and slightly higher than the 6.67% rate from a year ago.
Sam Khater, chief economist at Freddie Mac, noted that mortgage rates have been fluctuating between 6% and 7% for the past year. Despite the higher rates, there seems to be a gradual increase in homebuying activity as buyers adjust to the new normal. “Homebuyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home,” Khater explained.
Additionally, the average rate for a 15-year fixed mortgage also saw a slight increase, rising to 5.92% from 5.84% the week prior. This is a marginal change from the 5.95% rate recorded a year ago.
Meanwhile, the Mortgage Bankers Association (MBA) reported a 0.7% decline in total mortgage applications on a seasonally adjusted basis compared to the previous week, driven primarily by a 3% reduction in refinancing applications due to the rising rates.
In summary, while mortgage rates are on the rise and impacting refinancing activity, there is a glimmer of optimism in the market as potential homebuyers are becoming increasingly willing to navigate these changes and pursue home purchases. This could signal a potential stabilization of the housing market as it adapts to the current economic conditions.