The 30-year fixed-rate mortgage (FRM) averaged 6.29% for the week of Sept. 22, according to the Primary Mortgage Market Survey released by Freddie Mac, the second week the 30-year FRM averaged above 6%. A year ago at this time, the 30-year FRM averaged 2.88%.
“The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011,” says Freddie Mac chief economist Sam Khater. “Impacted by higher rates, house prices are softening, and home sales have decreased. However, the number of homes for sale remains well below normal levels.”
According to Freddie Mac, the 15-year FRM averaged 5.44%, up from 5.21% a week ago. A year ago, the 15-year FRM averaged 2.15%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.97%, up from 2.43% a year ago.
Despite rising mortgage rates, mortgage applications increased 3.8% from a week earlier for the week ending Sept. 16, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. On an unadjusted basis, the Market Composite Index—a measure of mortgage loan application volume—increased 14% from the previous week.
The Refinance Index increased 10% from the previous week and was 83% lower than the same week one year ago, according to the MBA. The seasonally adjusted Purchase Index increased 1% from a week earlier.
“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting. Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25%—the highest since October 2008,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “As with swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks, but remained well below last year’s levels, with purchase applications 30% lower and refinance activity down 83%.
According to the MBA, the ARM share of activity remained unchanged at 9.1% of total applications. The FHA share of total applications decreased 10 basis points to 13.3%, while the VA share of total applications decreased 40 basis points from the previous week to 10.9%.
