Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.23 percent.
“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” said Sam Khater, Freddie Mac’s Chief Economist. “As rates remain high and supply of unsold homes woefully low, incoming data shows that existing homes sales continue to fall. However, there are slightly more new homes available, and sales of these new homes continue to rise, helping provide modest relief to the unyielding housing inventory predicament.”
30-year fixed-rate mortgage averaged 7.23 percent as of August 24, 2023, up from last week when it averaged 7.09 percent. A year ago at this time, the 30-year FRM averaged 5.55 percent.
15-year fixed-rate mortgage averaged 6.55 percent, up from last week when it averaged 6.46 percent. A year ago at this time, the 15-year FRM averaged 4.85 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.
Instant Reaction: Mortgage Rates, August 24, 2023
By: Jessica Lautz
Dr. Jessica Lautz is the Deputy Chief Economist and Vice President of Research at the National Association of REALTORS®.
Mortgage rates jumped this week to 7.23% from 7.09% last week, the highest monthly mortgage payment since June 1, 2001, when they were 7.24%.
From June 1991 through May 2001, mortgage interest rates averaged 7.81%. Consumers may have felt comfortable taking on a mortgage in the 7% range. However, there’s a big difference between 22 years ago and today: home prices and inventory were more in line with wages and the population then. In June 2001, there were 2.11 million existing homes on the market. In data for July 2023, there were just 1.11 existing homes in the market.
The highest interest rate in 22 years translates into a monthly payment for the typical existing single-family home of $2,246 and a $1,948 payment for a condo. New home sales are on the rise while existing-home inventory is limited. However, the sales price is about $30,000 more than the typical existing home, which means a monthly mortgage payment of $2,379 for the typical new home. Until rates come down, this will hurt buyers’ opportunities to enter the market and the willingness of sellers to make a needed move.