Mortgage Rates Inch Up

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) announced that the 30-year fixed-rate mortgage averaged 6.48 percent as of January 5, 2023, up from 6.42 percent the previous week and significantly higher than 3.22 percent a year ago. The 15-year fixed-rate mortgage also rose to 5.73 percent. Chief Economist Sam Khater noted a drastic decline in mortgage application activity, reaching a 25-year low, primarily due to high mortgage rates. However, he predicts that easing inflation could lead to lower rates in 2023, with potential refinancing opportunities for recent borrowers.

Positive

• Predicted easing inflation could lead to lower mortgage rates in 2023.
• Large demographic tailwind of Millennial renters supports the purchase market.

Negative

• Mortgage application activity has reached a quarter-century low.
• 30-year and 15-year fixed-rate mortgage rates have significantly increased compared to last year.

MCLEAN, Va., Jan. 05, 2023 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.48 percent.

“Mortgage application activity sunk to a quarter century low this week as high mortgage rates continue to weaken the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

Khater continued, “Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market. Moreover, if rates continue to decline, borrowers who purchased in the last year will have opportunities to refinance into lower rates.”

News Facts

• 30-year fixed-rate mortgage averaged 6.48 percent as of January 5, 2023, up from last week when it averaged 6.42 percent. A year ago at this time, the 30-year FRM averaged 3.22 percent.
• 15-year fixed-rate mortgage averaged 5.73 percent, up from last week when it averaged 5.68 percent. A year ago at this time, the 15-year FRM averaged 2.43 percent.

The PMMS^® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT:
Angela Waugaman
703-714-0644
Angela_Waugaman@FreddieMac.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/296082c4-c9d1-4696-a109-888784bf170d

FAQ

What is the current average of the 30-year fixed-rate mortgage from Freddie Mac as of January 5, 2023?

The 30-year fixed-rate mortgage averaged 6.48 percent.

How does the current 15-year fixed-rate mortgage compare to last year?

The 15-year fixed-rate mortgage averaged 5.73 percent, up from 2.43 percent a year ago.

What trend is seen in mortgage application activity according to Freddie Mac's January 2023 report?

Mortgage application activity has dropped to a quarter-century low.

What factors could influence mortgage rates in 2023 according to Freddie Mac?

Easing inflation is expected to potentially lead to lower mortgage rates.

What demographic trend is mentioned that could support the housing market?

A strong job market and a large demographic of Millennial renters may help support the purchase market.