Mortgage rates surged this week, with the average rate for a 30-year fixed-rate mortgage rising to 6.79%, up significantly from 6.57% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey.
For the week ended June 1, the average rate for a 15-year fixed-rate mortgage was 6.18%, up from 4.32% the previous week.
“Mortgage rates jumped this week, as a buoyant economy has prompted the market to price-in the likelihood of another Federal Reserve rate hike,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Although there has been a steady flow of purchase demand around rates in the low to mid six percent range, that demand is likely to weaken as rates approach seven percent.”
The rise in mortgage rates continues to take its toll on mortgage applications. The Mortgage Bankers Association’s Weekly Applications Survey shows that for the week ended May 26, application volume fell 3.7% compared with the previous week.
It was the third consecutive week that mortgage application volume fell. Applications for refinances were down 45% from a year ago while applications for purchases were down 31%.
Photo: Wolfgang Hasselmann