Five Consecutive Weeks Increase In Mortgage Rates

Mortgage News March 22, 2023

According to the results of the Primary Mortgage Market Survey (PMMS) by Freddie Mac, mortgage rates are continuing their upward trend, with the 30-year fixed-rate mortgage (FRM) up from last week’s 6.65%, averaging 6.73% as of March 9, 2023. This is a significant increase from the 3.85% average a year ago at this time. The 15-year FRM also rose slightly to 5.95%, up from last week’s 5.89% and almost double the 3.09% average from a year ago.

Freddie Mac’s Chief Economist, Sam Khater, attributed the increase to the Federal Reserve’s more aggressive stance on monetary policy. While consumers are spending in sectors that are not interest rate-sensitive, such as travel and dining out, rate-sensitive sectors like housing are adversely affected. This results in potential homebuyers facing challenges of affordability and low inventory.

Interestingly, while mortgage rates are rising, mortgage application volume is also increasing. The Mortgage Bankers Association (MBA) reported a 7.4% week-over-week increase in overall mortgage application volume for the week ending March 3, 2023, after three weeks of declines. However, both purchase and refinance applications remain below year-ago levels when rates were much lower. The MBA’s President and CEO, Robert D. Broeksmit, CMB, cautioned that the recent increase in mortgage rates at the start of the busy spring buying season could cause prospective buyers to delay decisions until rates moderate.

Furthermore, a new report from has found that builder confidence has dropped significantly, reaching levels last seen in June 2012. This may not bode well for sellers, who are facing factors such as an increasing number of unsold homes, longer time on market, and decelerating price growth due to high mortgage rates. However, there are still opportunities for sellers with starter homes, as recent sales data show that the share of first-time homebuyers is up compared to one year ago. Additionally, the widespread implementation of hybrid working models provides employees more flexibility to choose where to live, which could make homes with easy access to public transportation systems more attractive to home buyers. Finally, sellers who are also buyers can still leverage their record-high equity, even if they have to adjust their expectations to lower asking prices.

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