The average rate for a 30-year, fixed-rate mortgage has edged up to match its level two weeks ago as it continues to see-saw in the 7% range, the latest Freddie Mac mortgage survey shows.
As of September 14, the rate for a 30-year, fixed-rate mortgage averaged 7.18%, up from 7.12% the previous week. Back on August 31, the average rate was 7.18%.
“Mortgage rates inched back up this week and remain anchored north of 7%,” said Sam Khater, chief economist at Freddie Mac. “The reacceleration of inflation and strength in the economy is keeping mortgage rates elevated.”
What Are the Current Mortgage Rates?
- The rate for a 30-year, fixed-rate mortgage averaged 7.18% as of September 14, up from 7.12% the previous week. A year ago at this time, the rate averaged 6.02%.
- The average rate for a 15-year, fixed-rate mortgage was 6.51% as of September 14, down from 6.52% a week earlier. At this time a year ago, the rate averaged 5.21%.
Figures for the weekly mortgage rates survey come from conventional mortgage applications submitted to lenders across the U.S. and then sent to Freddie Mac. The company buys mortgages and packages them as mortgage-backed securities.
Mortgage Applications Fewest Since 1996
Partly due to daunting mortgage rates, the volume of mortgage applications continues to be anemic.
The Mortgage Bankers Association’s latest weekly mortgage application survey shows that as of September 13, the number of applications had dropped for the seventh time in eight weeks. Application activity sank to its lowest level since 1996, says the MBA.
The number of applications dipped 0.8% from the previous week and declined 28.5% from the same time in 2022, according to the survey. The biggest driver of the decrease was a 5% drop in refinance applications compared with the previous week.
“Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate,” said Joel Kan, MBA’s vice president and deputy chief economist.
MBA figures indicate the average rate for a 30-year, fixed-rate mortgage rose to 7.27% last week. The MBA report uses rate data that’s separate from Freddie Mac’s findings.
Bob Broeksmit, president and CEO of MBA, said his organization “expects some of the recent volatility in rates to subside enough that the 30-year fixed rate will fall closer to 6% by the end of the year.”
How Will Inflation Affect Mortgage Rates?
As mortgage rates continue to bedevil home buyers, observers are eager to see what happens with the benchmark interest rate this month.
The Federal Reserve’s rate-setting committee is scheduled to meet September 19-20, when it’ll decide whether to raise, lower or maintain the benchmark rate known as the federal funds rate. That rate influences mortgage rates offered by banks and other lenders, but the Fed itself doesn’t set mortgage rates.
On the radar of Fed watchers is the inflation rate. In August, the annualized inflation rate jumped to 3.7% from 3.2% the previous month.
Lawrence Yun, chief economist at the National Association of Realtors, noted that the inflation rate remains above the Fed’s target of 2%. This raises the possibility that the Fed will bump up the benchmark rate this month.
However, Yun emphasized that the closely monitored core inflation rate—which includes housing but excludes food and energy prices—is trending downward, sinking to 4.3% in August from July’s 4.7%.
Inflation, Yun added, “will be one main determining factor in upcoming monetary policy decisions. Overdoing the rate hikes, considering that inflation is likely to calm, will unnecessarily damage the economy.”
Find the Best Mortgage Lenders of 2024
