MCLEAN, Va. — Freddie Mac released the results of its Primary Mortgage Market Survey on Thursday, Jan. 6, showing the 30-year fixed-rate mortgage is climbing up.
“Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” said Sam Khater, Freddie Mac’s Chief Economist.
The 30-year fixed-rate mortgage averaged 3.22 percent with an average 0.7 points for the week ending Jan. 6, up from the previous week when it averaged 3.11 percent. A year ago at this time, the 30-year fixed rate averaged 2.65 percent.
Within the same time frame, the 15-year fixed-rate mortgage averaged 2.43 percent with an average 0.6 point, up from an average of 2.33 percent from the previous week. Whereas a year ago, the 15-year fixed rate averaged 2.16 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.41 percent with an average 0.5 points, unchanged from last week. A year ago at this time, the 5-year ARM averaged 2.75 percent.
“With higher inflation, promising economic growth and a tight labor market, we expect rates will continue to rise,” Khater said. “The impact of higher rates on purchase demand remains modest so far given the current first-time homebuyer growth.”
Market analysts point to an overall housing shortage that contributes to rising home prices. Realtor.com estimates a 5.2 million single-family home shortage across the nation. A strong demand from young Millennial families has been met with a dearth of affordable homes.
New York State Realtors observed pending sales climb by 11.6 percent last November, according to its most recent figures. For the year, closed sales were up 21.1 percent in year-to-date comparisons while new listings were down 7.7 percent.
Prices of homes are going up, too. The median sales price jumped to $370,000 last November — a 12.1 percent increase over the median price from the year before. Contributing to those prices has been the lack of inventory. The inventory of homes has been down. Only 36,822 homes were available across the state last November, a 26.9 percent drop from the year before. Months supply of inventory fell to 2.8 months in November 2021 – a 34.9 percent drop from the 4.3 months of supply in November 2020. A 6-month to 6.5-month supply is considered to be a balanced market.
The Primary Mortgage Market Survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.
Freddie Mac has provided mortgage capital to lenders since its creation in 1970.