Mortgage rates rose for the fifth week in a row, as the Federal Reserve holds interest rates steady.
The 30-year fixed-rate mortgage rose and averaged 7.22% as of May 2, according to data released by Freddie Mac on Thursday.
That’s up 5 basis points from the previous week. One basis point is equal to one hundredth of a percentage point.
A year ago, the 30-year rate was averaging 6.39%.
The average rate on the 15-year mortgage was 6.47%, up from 6.44% last week. The 15-year was at 5.76% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging 7.41% as of Thursday afternoon. The Mortgage Bankers Association’s survey said that the 30-year was at 7.29% as of April 26.
What Freddie Mac said: “The 30-year fixed-rate mortgage increased for the fifth consecutive week as we enter the heart of Spring Homebuying Season,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon,” he said.
What are mortgage bankers saying? “With affordability remaining a challenge, more prospective buyers are turning to adjustable-rate mortgages to lower their monthly payments in the short term,” Bob Broeksmit, president and CEO of the MBA, said in a statement.
Looking ahead: Based on the meeting this week, the Fed indicated that “future rate decisions will be dependent on incoming inflation and employment data … [which] means that mortgage rates are not likely to ease significantly until incoming data suggests that inflation is en route to the Fed’s desired 2% level,” Hannah Jones, senior economic research analyst at Realtor.com, said in a statement.
“Recent data reflects a surprisingly resilient economy, which means rate-cut expectations have pushed out further into the back half of the year,” she added.
Written by: Aarthi Swaminathan @MarketWatch.com
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