Mortgage rates have risen this week, leading to a decrease in overall demand as many Americans reconsider their refinancing options.
According to Freddie Mac’s latest Primary Mortgage Market Survey, released on Thursday, the average rate for a benchmark 30-year fixed mortgage increased to 6.72%, up from 6.6% the previous week. This marks a rise from an average of 6.67% a year ago.
Freddie Mac’s chief economist, Sam Khater, noted, “This week, mortgage rates have reached levels similar to those experienced at this time in 2023.” He added that mortgage rates have fluctuated between 6% and 7% over the past year. While these higher rates have caused some hesitation among homebuyers, there is still a gradual willingness to move forward with home purchases, which has resulted in increased activity in the housing market.
Meanwhile, the average rate for a 15-year fixed mortgage also saw an uptick, moving from 5.84% last week to 5.92% this week, compared to an average of 5.95% one year prior.
The Mortgage Bankers Association (MBA) indicated that mortgage applications decreased by 0.7% on a seasonally adjusted basis compared to a week earlier, primarily due to the increase in rates, which contributed to a 3% decline in refinancing applications.
Despite the challenges presented by rising mortgage rates, the ongoing interest in home purchasing suggests a resilient market. Buyers are adapting to the current landscape, demonstrating that there is still potential for growth in the housing sector as individuals and families navigate these economic changes.
This situation not only reflects the complexities of the mortgage market but also highlights the adaptability of homebuyers as they seek to achieve their homeownership goals amid fluctuating rates.