Mortgage rates remain at elevated levels, rising to an average of 7.57% as of Oct. 12, according to the latest Primary Mortgage Market Survey from Freddie Mac. According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) has increased for five consecutive weeks and for 10 of the past 12 weeks dating back to the end of July.
“For the fifth consecutive week, mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase,” says Sam Khater, Freddie Mac’s chief economist. “The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low.”
The 7.57% average for the 30-year fixed-rate mortgage is up 80 basis points from the previous week and up 650 basis points from a year ago, when it averaged 6.92%. The 15-year fixed-rate mortgage averaged 6.89%, up from 6.09% a year ago.
Despite mortgage rates continuing their climb, Redfin reports more sellers are putting their homes on the market, and the Mortgage Bankers Association (MBA) reports mortgage applications are also increasing slightly.
The total number of homes for sale is down 14% on a year-over-year basis, but Redfin says this is the smallest decline since July. Mortgage applications for the week ending Oct. 6 increased 0.6%, according to the MBA’s Weekly Mortgage Application Survey.
“The level of [adjustable-rate mortgage] applications increased by 15% over the week, bringing the ARM share up to 9.2% of all applications, the highest share since November 2022. The yield curve has become less inverted in recent weeks, and ARM pricing has certainly improved,” says Joel Kan, MBA’s vice president and deputy chief economist.
Despite the increase, Kan says application activity remains “depressed” in a historical context, with purchase applications almost 20% behind last year’s pace. Refinance applications remain limited, and the average loan size has fallen to its lowest level since 2017, according to Kan.
On an unadjusted basis, the MBA’s Market Composite Index—a measure of mortgage loan application volume—increased 1% compared with the previous week. The Refinance Index was 9% lower than the same week a year ago, and the unadjusted Purchase Index was 19% lower than the same week a year ago.
