The average rate for a 30-year fixed rate mortgage jumped this week to 6.88%, up from 6.82% last week and up from 6.27% one year ago, according to Freddie Mac’s Primary Mortgage Market Survey.
“Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path,” says Sam Khater, chief economist for Freddie Mac, in a statement. “While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different economic picture.”
“Since inflation decelerated from 9 percent to 3 percent between June 2022 and June 2023, the annual growth rate of inflation has remained effectively flat, ranging from 3.1 percent to 3.7 percent and averaging 3.3 percent,” Khater explains. “The March estimate of 3.5 percent annual growth is in the middle of that range. However, the market’s reaction was dramatically different, as illustrated by a significant drop in the Dow Jones Industrial Average post-announcement.”
“It’s clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealized expectations of a recession from a year ago,” he adds.
The average rate for a 15-year fixed-rate mortgage was 6.16%, up from 6.06% last week, and up from 5.54% a year ago.
Photo: Ali Rezaei
