According to Freddie Mac’s recently released Primary Mortgage Market Survey, the average rate for a 30-year fixed mortgage rate was 3.13% this week, compared to 3.12% last week. Average rates for a 15-year fixed mortgage were 2.54%, while 5/1 adjustable rate mortgages (ARMs) averaged 3.2%.
The recent surge in mortgage rates began in March when the Federal Reserve announced plans to reduce its purchase of mortgage-backed securities. Mortgage rates are directly tied to the MBS purchases, which can drive rates up or down depending on the activity of the purchases. When the Fed announced it would be winding down its program, this set off a chain reaction that sent mortgage rates upward.
This is the longest stretch of increasing mortgage rates since February, with each week showing a small but steady rise until this week when rates stabilized. The slight uptick in mortgage rates is still good news for borrowers, as rates remain near historic lows. Fixed mortgage rates have held below 3.5% for over a year, and ARMs are at their lowest since before the pandemic.
Mortgage rates are just one part of the equation when it comes to buying a home. Homebuyers must also consider home values, loan limits, affordability, and access to credit all come into play when factoring in the cost of a new home. Despite the recent surge in mortgage rates, low borrowing costs still make homeownership accessible to many first-time buyers.
Mortgage rates have remained relatively flat after a weeks-long surge, according to Freddie Mac’s Primary Mortgage Market Survey. The average rate for a 30-year fixed mortgage rate was 3.13% this week, while 15-year fixed mortgages had an average rate of 2.54%, and 5/1 adjustable rate mortgages (ARMs) averaged 3.2%. This followed a long period beginning in March where mortgage rates rose steadily due to Federal Reserve reducing its purchase of mortgage-backed securities.
The ability to buy a home remains accessible to many first-time buyers due to the low borrowing costs. Even with an uptick in mortgage rates, they remain near historic lows with fixed mortgage rates holding below 3.5% for over a year and ARMs at their lowest levels since before the pandemic. Other factors, such as home values, loan limits, affordability, and access to credit, must also be considered when purchasing a home.
In conclusion, mortgage rates remain slightly higher after weeks of a steady increase, but still remain near historical lows. This provides buyers with good conditions to consider entering the housing market, as access to credit, loan limits, affordability, and home values all play a role in the decision making process.
This article was contributed on Nov 18, 2023