Mortgage Rates Inch Closer to 7%
Buyers would be smart to shop around: The large dispersion in rate offerings among lenders could amount to several hundreds of dollars, Freddie Mac says.
September 29, 2022
Melissa Dittmann Tracey
Home buyers who waited to buy a home this month compared to last month may have some regrets. Home buying is 12% more expensive than just a month ago. Fast-rising mortgage rates—up one percentage point in September alone—have added an extra $250 more onto monthly mortgage payments over the past month, Nadia Evangelou, senior economist and director of forecasting, writes at the National Association of REALTORS® blog.
The higher rates are prompting the housing market to drastically slow: Pending home sales fell 24% last month compared to last year, and existing-home sales were down 20% annually in August.
Freddie Mac reports the 30-year fixed-rate mortgage averaged 6.70% this week. That is up from 3.01% a year ago.
“The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” says Sam Khater, Freddie Mac’s chief economist. He adds that home shoppers would be wise to shop around.
“Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year,” he notes. “This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range. The large dispersion in rates means it has become even more important for home buyers to shop around with different lenders.”
Recent Mortgage Rate Averages
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 29:
30-year fixed-rate mortgages: averaged 6.70%, with an average 0.9 point, rising from last week’s 6.29% average. Last year at this time, 30-year rates averaged 3.01%.
15-year fixed-rate mortgages: averaged 5.96%, with an average 1.3 point, increasing from last week’s 5.44% average. A year ago, 15-year rates averaged 2.28%.
5-year hybrid adjustable-rate mortgages: averaged 5.30%, with an average 0.4 point, rising from last week’s 4.97% average. A year ago, 5-year ARMs averaged 2.48%.
Freddie mac reports commitment rates with average points to better reflect the total upfront costs of obtaining the mortgage.