The latest data released by Freddie Mac shows a modest increase in mortgage rates, but this hasn’t deterred home buyers. As of January 11, the 30-year fixed-rate mortgage averaged at 6.66%. This represents a 4 basis point increase from the previous week, with one basis point equal to one-hundredth of one percentage point. It’s worth noting that a year ago, the average rate for a 30-year mortgage was 6.33%.
In contrast, the average rate for a 15-year mortgage fell slightly to 5.87% from 5.89% the previous week. Looking back a year ago, the 15-year mortgage rate stood at 5.52%.
Freddie Mac determines its weekly report on mortgage rates by analyzing thousands of applications received from lenders across the country. These applications are submitted to Freddie Mac when borrowers apply for mortgages.
According to separate data from Mortgage News Daily, the 30-year fixed-rate mortgage reached an average of 6.78% on Thursday afternoon.
Freddie Mac’s Insight
Sam Khater, chief economist at Freddie Mac, commented on the current mortgage rate situation. He stated, “Mortgage rates have not moved significantly in the last three weeks and remain in the mid-six percent range, which has slightly boosted homebuyer demand.” Khater also added, “Even with this minor increase in demand, coupled with limited inventory, home prices continue to rise faster than incomes, making affordability a major challenge for buyers.”
Expert Predictions
The Mortgage Bankers’ Association (MBA) predicts a resurgence of activity in the housing market as long as rates remain below 7 percent in the foreseeable future. MBA’s president and CEO, Bob Broeksmit, stated, “We anticipate renewed activity in the housing market heading into the spring, especially if housing supply continues to rise.”
Despite the slight rise in mortgage rates, home buyers remain undeterred. With expert projections pointing towards continued activity in the housing market, it will be interesting to see how affordability and supply dynamics shape buyer behavior moving forward.