The average 30-year-fixed rate mortgage climbed to 3.56% during the week ending Jan. 20, rising from 3.45% the week prior, according to the latest Freddie Mac PMMS Mortgage Survey. A year ago, the 30-year fixed-rate mortgage averaged 2.77%. Most economists believe rates will continue to climb in the weeks and months ahead.
“Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
The Federal Reserve announced in December that it is accelerating its tapering of bond-purchases starting in January. It is reducing the pace of its monthly purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. In November, the Fed started with a reduction of $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities.
The rise in mortgage rates moved in concert with the 10-year Treasury yield, which reached 1.83% yesterday, compared to 1.67% on the previous Wednesday.
The report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
The 15-year-fixed-rate mortgage averaged 2.79% last week, up from 2.62% the week prior. A year ago at this time, it averaged 2.21%. According to Khater, “supply remains near historically tight levels and home prices remain high, keeping the market competitive.”
As we look forward to 2022, the non-QM market is predicted to grow substantially. Housing supply constraints and refinance decline are among market factors contributing to this expected growth for the non-QM sector.
Presented by: Acra Lending
The Mortgage Bankers Association (MBA) showed on Tuesday that mortgage applications climbed 2.3% for the week ending Jan. 14. The growth was buoyed by a 7.9% increase in the trade group’s seasonally adjusted purchase index. On the refinance front, the index dipped by 3.1% from the previous week.
Economists expect rates to increase in 2022 but will still be close to record-low levels. The MBA forecasts that 30-year mortgage rates will reach 4% by the end of 2022.