Freddie Mac’s most recent survey has unveiled a temporary halt in the surge of mortgage rates. Following a series of consistent rises, the average 30-year fixed-rate mortgage (FRM) has decreased by two basis points to 7.76% this week. It is worth noting that a year ago, the 30-year FRM stood at 6.95%, indicating a significant increase over the past year.
In contrast, the 15-year fixed-rate mortgage has remained unchanged, maintaining a steady average of 7.03% compared to the previous week. This time last year, the 15-year FRM averaged 6.29%.
Despite a brief pause in its ascent, the 30-year fixed-rate mortgage remains stubbornly high, hovering just below 8%. The Federal Reserve has yet to make a decision on interest rates, leaving the door open for a potential hike before the year’s end. This uncertainty, coupled with geopolitical tensions, is likely to have a significant impact on the economy and could continue to hinder progress in the housing market. As a result, mortgage applications have declined for the third week in a row, with many buyers turning to adjustable-rate mortgages as a more affordable option. In fact, ARM loans have increased by almost 10% in the past week alone, making up 10.7% of all applications.