Mortgage rates have moved up for the 6th week in a row according to the Freddie Mac Primary Mortgage Market Survey (FM)
- 30-YR FIXED: Averaged 3.17% up from last week with an average 0.7 point. Rates, however, are still down when compared to the same time last year when they averaged 3.50%.
- 15-YR FIXED: Averaged 2.45% up from last week with an average 0.6 point. Rates, however, are still down when compared to the same time last year when they averaged 2.92%
Sam Khater, Freddie Mac’s Chief Economist, noted that purchase demand remains strong as we saw yesterday with the mortgage application data from MBA. However, these higher rates are pricing some out of the market. Khater said in a statement, “Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power. Unfortunately, this has disproportionately affected the low end of the market, where supply is the slimmest.”
How many people have been priced out? According to a report last month from NAHB, “1.3 million households would be priced out of the market for a nationwide median priced home ($346,757) if mortgage interest rates rise by a quarter-point from 2.75% to 3%.” We are clearly past that 3% threshold but based on what we are seeing happen in Canada. A little cooling off of the housing market is probably not a bad thing.