Mortgage Rates Surpass Seven Percent

Rhea-AI Summary

On October 27, 2022, Freddie Mac (OTCQB: FMCC) reported the 30-year fixed-rate mortgage averaged 7.08%, the highest since April 2002, causing stagnation in the housing market. Chief Economist Sam Khater noted that ongoing inflation and rising costs are diminishing consumer confidence, leading potential homebuyers to delay purchases, thereby pushing demand and home prices lower. Additionally, the 15-year fixed-rate mortgage averaged 6.36%, while the 5-year ARM averaged 5.96%. Freddie Mac is improving its data collection methods, with changes effective November 2022.

Positive

• Freddie Mac is enhancing the Primary Mortgage Market Survey (PMMS) to improve data quality and diversity.
• The upcoming changes will ensure more accurate data collection from thousands of lenders.

Negative

• The 30-year fixed-rate mortgage reaching 7.08% indicates increasing borrowing costs for consumers.
• Diminished consumer confidence is leading to a decline in demand for homes.
• Rising mortgage rates could negatively impact home prices.

MCLEAN, Va., Oct. 27, 2022 (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 7.08 percent.

“The 30-year fixed-rate mortgage broke seven percent for the first time since April 2002, leading to greater stagnation in the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”

News Facts

• 30-year fixed-rate mortgage averaged 7.08 percent with an average 0.8 point as of October 27, 2022, up from last week when it averaged 6.94 percent. A year ago at this time, the 30-year FRM averaged 3.14 percent.
• 15-year fixed-rate mortgage averaged 6.36 percent with an average 1.4 point, up from last week when it averaged 6.23 percent. A year ago at this time, the 15-year FRM averaged 2.37 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.96 percent with an average 0.3 point, up from last week when it averaged 5.71 percent. A year ago at this time, the 5-year ARM averaged 2.56 percent.
  

The PMMS^® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

NOTE: Freddie Mac is making a number of enhancements to the PMMS to improve the collection, quality and diversity of data used. Instead of surveying lenders, the weekly results will be based on applications received from thousands of lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. Additionally, we will no longer publish fees/points or adjustable rates. The newly recast PMMS will be put in place in November 2022, and the weekly distribution will be Thursdays at 12 p.m. noon ET.

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/e564eb09-1af2-481d-8f94-3ea6fffd9407 

FAQ

What is the current average rate for a 30-year fixed-rate mortgage from Freddie Mac (FMCC)?

As of October 27, 2022, the average rate for a 30-year fixed-rate mortgage is 7.08%.

How has the 30-year fixed mortgage rate changed compared to last year?

The current 30-year fixed mortgage rate is significantly up from 3.14% a year ago.

What were the average rates for the 15-year fixed and 5-year ARM mortgages?

The 15-year fixed-rate mortgage averaged 6.36%, and the 5-year ARM averaged 5.96%.

When will Freddie Mac implement the new PMMS enhancements?

The enhancements to PMMS are set to take effect in November 2022.

What impact do current mortgage rates have on the housing market?

Higher mortgage rates are causing stagnation in the housing market and declining consumer confidence.