Mortgage Rates Rise Amid Market Uncertainties
Freddie Mac’s 30-year fixed-rate mortgage (FRM) rate has reached 7.57% during the week ending Thursday, October 12, 2023, marking the fifth consecutive week of increase, according to the company’s economist, Sam Khater. This rate is higher than last week’s 7.49%.
Affordability Issues Persist in Housing Market
Despite robust economic and income growth, the housing market continues to face affordability challenges, leading to a significant drop in purchase demand. In fact, purchase demand has hit a three-decade low. A year ago, the average rate for a similar mortgage was 6.92%.
15-Year FRM Rates Also on the Rise
Not only have 30-year FRM rates increased, but the average rate for a 15-year FRM has also risen to 6.89% as of last Thursday, up from the previous week’s rate of 6.78%. Compared to last year’s rate of 6.09%, this is a considerable increase.
Surprising Increase in Mortgage Applications
Despite the rising rates, there was a slight uptick in mortgage application volume, which increased by 0.6% during the week ending Sunday. This unexpected rise in applications was reported by the Mortgage Bankers Association.
Freddie Mac’s Commitment to Borrowers
Freddie Mac’s mission revolves around ensuring liquidity, stability, affordability, and equity throughout economic cycles. The company places particular emphasis on borrowers who can make a 20% down payment and maintain excellent credit.
This article provides valuable insights into the recent rise in mortgage rates. It emphasizes the challenges faced by the housing market and the impact on purchase demand. The increase in 15-year FRM rates and the surprising rise in mortgage applications add further depth to the understanding of the current market situation. Freddie Mac’s commitment to borrowers highlights their dedication to supporting responsible homeownership. This article presents a comprehensive overview of the mortgage landscape, offering readers a well-rounded perspective on the subject.
