The latest data released by Freddie Mac on September 14 shows that the 30-year fixed-rate mortgage is averaging 7.18%. This is an increase of 6 basis points from the previous week. A year ago, the average rate for a 30-year mortgage was 6.02%.
Meanwhile, the average rate for a 15-year mortgage stands at 6.51%, slightly down from 6.52% last week. Compared to a year ago, when it was at 5.21%, this shows a notable increase.
Freddie Mac derives its weekly mortgage rate report from thousands of loan applications received from lenders across the country. The data highlights the impact of a strong economy and rising inflation on current mortgage rates.
According to separate data from Mortgage News Daily, the 30-year fixed-rate mortgage is averaging 7.22% as of Thursday afternoon.
Freddie Mac's Perspective
Sam Khater, the chief economist at Freddie Mac, acknowledged the role of inflation and economic strength in keeping mortgage rates high. However, he suggests that potential homebuyers can still find favorable rates by shopping around and comparing different lenders.
Insights from Economists
Economist Jiayi Xu from Realtor.com notes that the Freddie Mac fixed rate for a 30-year mortgage has remained above 7% due to investor concerns about the impact of rising inflation on future Fed rate decisions.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association, expressed how high mortgage rates are dampening borrower demand. In fact, mortgage applications in early September have fallen to levels last seen in 1996. The association predicts that the 30-year rate will likely trend closer to 6% by year-end.
In conclusion, a robust U.S. economy has contributed to mortgage rates exceeding 7%. While these rates may appear high, potential buyers can still take advantage of competitive rates by exploring different lenders. Industry experts are closely monitoring inflation and its potential impact on future rate decisions. Despite the challenges posed by high rates, the Mortgage Bankers Association anticipates a gradual decline by the end of the year.