US mortgage rates rose for the second consecutive week, hitting a six-month high, according to Freddie Mac.
Freddie Mac chief economist Sam Khater said that this week’s uptick in mortgage rates is a result of growing optimism about the economy’s recovery from the pandemic. The average rates for a 30-year fixed mortgage climbed 16 basis points to 2.97% this week – the highest since August.
Data from Freddie’s Primary Mortgage Market Survey also showed a week-over-week increase in the 15-year fixed-rate loan and the five-year Treasury-indexed hybrid adjustable-rate mortgage, up to 2.34% and 2.99%, respectively.
Rising mortgage rates are already affecting the demand for home financing across the nation. Mortgage applications fell 11.4% this week, according to the Mortgage Bankers Association.
“Optimism continues as the economy slowly regains its footing, thus affecting mortgage rates,” Khater said. “Though rates continue to rise, they remain near historic lows. However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.”