After dipping slightly each of the previous two weeks, mortgage rates went back on the rise this week, with the average rate for a 30-year fixed-rate mortgage (FRM) increasing to 4.62%, up from 4.54%, according to Freddie Mac’s Primary Mortgage Market Survey.
A year ago at this time, the 30-year FRM averaged 3.91 percent.
“The 30-year fixed-rate mortgage climbed eight basis points to 4.62 percent, and the Federal Reserve Board on Wednesday raised the federal funds rate by 25 basis points,” says Sam Khater, chief economist for Freddie Mac, in a statement. “The good news is that the impact on consumer budgets will be smaller than past rate hike cycles. That is because a much smaller segment of mortgage loans in today’s market are pegged to short-term rate movements. The adjustable rate mortgage (ARM) share of outstanding loans is a lot smaller now – eight percent versus 31 percent – than during the Fed’s last round of tightening between 2004 and 2006.
“Still, inflation continues to firm and borrowing costs are inching higher,” Khater adds. “Although wages are slowly growing, stronger gains would certainly go a long way in helping consumers offset these increases in prices and rates.”
For the week ended June 14, the average rate for a 15-year FRM was 4.07%, up from 4.01%. A year ago at this time, the 15-year FRM averaged 3.18%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.83%, up from 3.74%. A year ago at this time, the five-year ARM averaged 3.15%.