The average 30-year fixed mortgage shot past the 7 percent mark for the first time since April 2002, according to Freddie Mac’s most recent market survey for the week of October 27, 2022. Last year at the same time, the average 30-year mortgage rate stood at 3.14 percent.
The new 20-year high comes on the heel of successive interest rate hikes by the U.S. Federal Reserve Bank, which is trying to combat higher inflation rates that have plagued the U.S. economy in the aftermath of the COVID pandemic and the ongoing military conflict between Russia and Ukraine.
Expectedly, higher borrowing costs are starting to slow down home sales activity on a wide scale, according to several recent reports. Pending transactions plunged 24.2%, according to the The National Association of Realtors (NAR), which added that it “expects existing-home sales to decline 15.2% in 2022, to 5.19 million units, while new home sales are projected to fall by 20.9%”. Meanwhile, luxury home sales recorded their biggest annual sales drop ever, plunging by 28 percent in Q3, said Redfin.
- 30-Year Fixed: Averaged 7.08 percent, up from last week when it averaged 6.94 percent. A year ago at this time, the 30-year FRM averaged 3.14 percent.
- 15-Year Fixed: Averaged 6.36 percent, up from last week when it averaged 6.23 percent. A year ago at this time, the 15-year FRM averaged 2.37 percent.
- 5-Year Adjustable (ARM): Averaged 5.96 percent, up from last week when it averaged 5.71 percent. A year ago at this time, the 5-year ARM averaged 2.56 percent.