After weeks of little movement in the 2.88% range, the average 30-year, fixed-rate mortgage rose to 3.01% this week. Economist cites “many factors” pushing the increase.
MCLEAN, Va. – The average 30-year, fixed-rate mortgage has fluctuated little over the past few months, hovering somewhere around the 2.88% range. However, it rose to 3.01% last week, breaking the psychological 3% barrier.
“Mortgage rates rose across all loan types this week as the 10-year U.S. Treasury yield reached its highest point since June,” says Sam Khater, Freddie Mac’s chief economist. “Many factors led to this increase, including the Federal Reserve communicating that it will taper its support of the capital markets, the broadening of inflation and emerging energy supply shortages, which compound other labor and materials shortages.”
The Federal Reserve Board decision might have a longer-term impact. At its September meeting, the Fed suggested it would cut down on its number of bond buys, done to stimulate the economy. Since July 2021, the Fed has been buying $80 billion in Treasury securities and $40 billion in mortgage-backed securities (MBS) each month. The cutback in mortgage securities could push rates higher over time.
“We expect mortgage rates to continue to rise modestly, which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year,” Khater adds.
Average mortgage rates for the week of Sept. 30, 2021 –
- The 30-year fixed-rate mortgage averaged 3.01% with an average 0.7 point, up from last week’s 2.88%. A year ago, the 30-year FRM averaged 2.88%.
- The 15-year fixed-rate mortgage averaged 2.28% with an average 0.6 point, up from last week’s averaged 2.15%. A year ago, the 15-year FRM averaged 2.36%.
- The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.48% with an average 0.3 point, up from last week’s 2.43%. A year ago, the 5-year ARM averaged 2.90%.
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