Mortgage Rates Jump as Home Affordability Drops

Published by FOX Business | July 14, 2022

The average for a 30-year fixed-rate loan is now at 5.51%, up 2.88% from a year ago

U.S. mortgage rates are up again after two straight weeks of declines, as the cost of homeownership continues to price would-be buyers out of the housing market.

That’s causing some potential buyers to back out of deals, lessening competition and increasing the number of homes available for sale.

Freddie Mac’s latest Primary Mortgage Market Survey released Thursday shows the average rate for a 30-year fixed-rate mortgage is now at 5.51%, up from 5.3% last week. Last year at this time, the rate for America’s most popular mortgage product averaged 2.88%.

The average for a 15-year fixed-rate note is also up, climbing to 4.67% from 4.45% a week ago. For the same week in 2021, the 15-year rate sat at 2.22%.

“Mortgage rates are volatile as economic growth slows due to fiscal and monetary drags,” said Sam Khater, Freddie Mac’s chief economist. “With rates the highest in over a decade, home prices at escalated levels, and inflation continuing to impact consumers, affordability remains the main obstacle to homeownership for many Americans.”

According to data from the Mortgage Bankers Association, the average purchase loan size has retreated from the record high of $460,000 reached in March, dropping to $415,000 for the week ending July 8.

At the same time, demand for mortgage applications has fallen for two weeks in a row.

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