The 30-year fixed-rate mortgage averaged 3.45% in the week ending Jan. 13, up from 3.22% the week before, said Freddie Mac. This is the highest average rate since March 2020, when it hit 3.5%.
“Mortgage rates rose across all types of mortgage lending, with 30-year fixed rates up nearly a quarter of a percent from last week,” said Sam Khater, chief economist at Freddie Mac. Sam Khater, chief economist at Freddie Mac, said. “The increase in mortgage rates this year has yet to affect home-buying demand, but given the rapid rate of home price growth, it is likely to dampen demand for the foreseeable future.”
“The mild Omicron wave impact, despite its high case count, points to a brighter post-pandemic horizon, a sentiment that underpins a more positive outlook for the economy,” said Ratiu. economy,” Ratiu said.
At today’s rates, median-priced homebuyers are paying about $219 more per month than they were a year ago, adding more than $2,600 to their annual housing costs, Ratiu said.
“With the prices of most consumer goods and services increasing, buyers are feeling a tight squeeze on their wallets,” said Ratiu. “Affordability continues to be a central challenge for first-time buyers this year.”
There are also signs that some homebuyers have started shopping earlier than the typical spring buying season, Ratiu said.
Last week, mortgage applications increased slightly from the previous week, according to the Mortgage Bankers Association. Because so many people are looking to buy a home, Joel Kan, MBA’s vice president of economic and industry forecasting, said he expects new mortgage applications to continue to surge.
Applications for a government-backed loan – an attractive option for first-time homebuyers and those with less money to pay late or a poorer credit score – have also increased, he said, with applications Apply for both Federal Housing Administration (FHA) and VA loans.
“The housing market starts in 2022 on a strong footing,” said Kan. “The MBA expects solid buying activity this year, as strong demographic and economic drivers support housing demand. However, the strength of growth will depend on home inventories. stay growing faster to meet demand.”