Mortgage rates rise to their highest level since 2009 — RISMedia

The 30-year fixed rate mortgage (FRM) averaged 5.27% this week, marking a further increase from last week’s average of 5.10%, according to the primary market survey. mortgage.® (PMMS®) published by Freddie Mac on Thursday.

Main conclusions:

  • The 30-year fixed rate mortgage averaged 5.27% with an average of 0.9 points as of May 5, 2022, up from last week when it averaged 5.10%. A year ago at this time, the 30-year FRM averaged 2.96%.
  • 15-year fixed rate mortgages averaged 4.52% with an average of 0.8 points, up from last week when they averaged 4.40%. A year ago at this time, the 15-year FRM averaged 2.30%.
  • The 5-year Treasury-linked hybrid variable rate (ARM) mortgage averaged 3.96% averaging 0.2 points, up from last week when it averaged 0.2 points. 3.78%. A year ago at this time, the 5-year ARM averaged 2.70%.

Expert Takeaways:

“Mortgage rates resumed their ascent this week as the 30-year fixed rate hit its highest level since 2009,” said Sam Khater, chief economist at Freddie Mac. “While housing affordability and inflationary pressures pose challenges to potential buyers, house price growth will continue but is expected to slow in the coming months.”

“The Freddie Mac fixed rate for a 30-year loan resumed its rise this week, rising from 5.10% to 5.27%, on the heels of two significant measures announced by the Federal Reserve on Wednesday,” realtor said. com® Senior Economic Research Analyst, Joël Berner. “In an attempt to counter the most severe inflation since 1982, the Federal Open Market Committee implemented the largest increase in interest rates since 2000 to slow the flow of money into the economy. Additionally, it has signaled its intention to shrink the money supply by reducing the size of its balance sheet by tens of billions of dollars each month. Pulling on this lever increases the power of the rate hike, leading Chairman Jerome Powell to signal that further rate increases of more than 50 basis points are not imminent. This news was greeted enthusiastically by stock market investors. These initiatives, although major in their scope and their expected impact on inflation, had a more moderate effect on mortgage rates. This is mainly because the moves were expected and the market had already priced them in for the past few weeks.

Berner continued, “After nearly three years of mortgage rates below 4%, a new reality has emerged for homebuyers. Not only are listing prices at an all-time high, but financing a home purchase has become much more expensive. With much higher monthly payments, buyers who don’t have savings for a large down payment risk being shut out of the market. Unfortunately, this is happening just as nationwide rents are at an all-time high, making it harder to save for those looking to buy their first home. Good news for determined buyers is that the number of homes for sale, while still below pre-pandemic levels, is showing a glimmer of hope. There were 3% more new listings on Realtor.com in the last week of April than at the same time last year. As potential buyers budget for a new mortgage and assess whether to continue their home search in light of affordability issues, they may find competition dwindling as more mortgage options become available. house come on the market.

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