Mortgage Rates Increase for Fifth-Straight Week

The 30-year fixed-rate mortgage (FRM) averaged 7.22% this week, rising for the fifth-consecutive week and up from last week’s 7.17%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac, released Thursday. 

This week’s numbers: 

  • The 30-year FRM averaged 7.22% as of May 2, 2024, up from last week when it averaged 7.17%. A year ago at this time, the 30-year FRM averaged 6.39%.
  • The 15-year FRM averaged 6.47%, up from last week when it averaged 6.44%. A year ago at this time, the 15-year FRM averaged 5.76%.

As rates rose again this week, the Mortgage Bankers Association (MBA) reported a drop in mortgage applications this week, decreasing 2.3% from one week earlier, according to the latest Weekly Mortgage Applications Survey from MBA for the week ending April 26. 

What the experts think:

“The 30-year fixed-rate mortgage increased for the fifth consecutive week as we enter the heart of Spring Homebuying Season,” said Sam Khater, Freddie Mac’s Chief Economist. “On average, more than one-third of home sales for the entire year occur between March and June. With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon. However, many seem to have acclimated to these higher rates, as demonstrated by the recently released pending home sales data coming in at the highest level in a year.” Sr. Economic Research Analyst Hannah Jones commented:

“The Freddie Mac fixed rate for a 30-year mortgage climbed 5 basis points this week to 7.22% upon still-strong economic data ahead of the Fed meeting. This week’s data marks the fifth consecutive week of increase, with mortgage rates reaching their highest level since late November. In Wednesday’s meeting, the FOMC voted to hold rates steady and Chair Powell emphasized, once again, that future rate decisions will be dependent on incoming inflation and employment data. This means that mortgage rates are not likely to ease significantly until incoming data suggests that inflation is convincingly en route to the Fed’s desired 2% level. Recent data reflects a surprisingly resilient economy, which means rate cuts expectations have pushed out further into the back half of the year.

“Still-high home prices and climbing mortgage rates have kept the cost of purchasing a home well out of the realm of possibility for many would-be buyers. However, recent housing data suggests the market is slowly moving in a more favorable direction. Inventory climbed 30.4% annually in April, boosted by an increase in seller activity. Even more promising was the 41.0% increase in homes priced between $200,000 and $350,000 compared to the previous year, fueled by more small and affordable homes in the South. Though inventory levels are moving in the right direction, the number of homes on the market is still nearly 40% lower than pre-pandemic. More homes on the market and lower mortgage rates would help make the cost of purchasing a home more feasible for home shoppers.”

“Inflation remains stubbornly high, and this trend is convincing markets that rates, including mortgage rates, are going to stay higher for longer. No doubt, this is a headwind for the housing and mortgage markets, with the 30-year fixed mortgage rate increasing last week, the highest level since November 2023,” said Mike Fratantoni, MBA’s SVP and chief economist. “Application volume for both purchase and refinances declined over the week and remains well below last year’s pace. One notable trend is that the ARM share has reached its highest level for the year at 7.8 percent. Prospective homebuyers are looking for ways to improve affordability, and switching to an ARM is one means of doing that, with ARM rates in the mid-6 percent range for loans with an initial fixed period of five years.”

For the full data set for this past week’s mortgage applications update, click here. 

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