Housing News

Mortgage Interest Rates Climbed, But Remain Lower Than a Year Ago

Mortgage interest rates climbed this week, with the average rate on a 30-year fixed home loan rising to 6.51%, according to Freddie Mac data.

Rates rose from an average 6.36% a week earlier, but remained below the 6.86% average recorded at this time last year.

“As rates fluctuate, aspiring buyers should remember that by shopping around for the best mortgage rate and getting multiple quotes, they can potentially save thousands,” Freddie Mac Chief Economist Sam Khater said in a statement.

Indeed, even relatively small shifts in rates can affect monthly housing costs.

Homebuyers purchasing a $400,000 home with 20% down would pay about $76 less per month at today’s average mortgage rate than they would have a year ago.

At this week’s average rate of 6.51%, the monthly principal and interest payment comes to roughly $2,023, compared with about $2,099 when rates averaged 6.86% at this time last year. Over 12 months, that adds up to about $912 in savings, or more than $27,000 over the life of a 30-year fixed-rate loan.

Many homebuyers are still entering the market despite rate fluctuations. Pending home sales, which measure signed contracts on existing homes, rose 1.4% in April from March, according to the National Association of Realtors.

Pending sales also increased 3.2% from a year earlier.

The uptick may come down to spring market conditions that offer advantages for homebuyers.

Housing stock remains above year-ago levels in many markets, homes are spending longer on the market, and softer list prices in some areas are giving shoppers more room to negotiate. That adds to the overall affordability picture.