A year ago at this time, the average 30-year fixed-rate loan was just 2.72% November 24, 2021, 9:56 am
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Mortgage rates remained at 3.10% in the week ending Nov. 24, according to the latest Freddie Mac PMMS mortgage report. A year ago at this time, the average 30-year fixed-rate loan averaged just 2.72%.
Sam Khater, Freddie Mac’s chief economist, said interest rate volatility has been low, despite the noise around the economy, inflation, and monetary policy. “For most of 2021, mortgage rates have stayed within half a percentage point, which is a smaller range than in past years.”
The survey focuses on conventional, conforming, and fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Economists at Freddie Mac said the 15-year fixed-rate mortgage averaged 2.42% last week, up slightly from 2.39% the week prior. It’s also higher than it was a year ago, at 2.28%. Meanwhile, the five-year ARM dropped slightly to 2.47%, down two basis points from last week. A year ago, 5-year ARMs averaged 3.16%.
Mortgage rates tend to move in concert with the 10-year Treasury yield, which reached 1.67% on Nov. 23, up from 1.63% a week before.
Despite higher rates, mortgages applications increased last week due to a strong housing demand. The overall market composite index rose 1.8% for the week ending Nov. 19, according to the Mortgage Bankers Association (MBA).
“Purchase activity increased for the third straight week, as housing demand remains robust, even as the housing market approaches the typically slower holiday season,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting, in a statement.
Regarding refi activity, Kan added that “borrowers continue to lock in mortgages in anticipation of higher rates in the future.”
The MBA, for instance, has projected rates to hit 4% by the end of 2022. The trade organization also has forecasted purchase mortgage originations to grow 9% to a record $1.73 trillion in 2022. Refis are projected to fall 62% to $860 billion next year.