Housing News

Mortgage Rates Rise, But Remain Lower Than Last Spring

Mortgage interest rates ticked up this week as the war in Iran continued. But they were about half a point lower than they were during last year’s spring housing market.

Rates averaged 6.22% for 30-year, fixed-rate loans in the week ending March 19, according to Freddie Mac data. That was up from 6.11% in the previous week, but down from 6.67% at this time last year.

“Potential homebuyers are poised for a more affordable spring homebuying season than last with the market experiencing improvements in purchase applications and pending home sales,” said Freddie Mac Chief Economist Sam Khater in a statement.

Purchase applications rose 1% in the week ending March 13 compared to a week earlier, according to the Mortgage Bankers Association (MBA).

“Overall purchase applications remained ahead of last year’s pace, supported by higher inventory and slowing home-price growth in many markets,” said MBA’s Deputy Chief Economist Joel Kan in a statement.

Someone buying a typical home would save nearly $100 a month due to the lower rates. That adds up to roughly $1,100 a year and more than $33,000 over the life of a 30-year, fixed-rate loan.

(This assumes they purchased a median-priced home of $391,617 with 20% down at a 6.22% rate compared to a 6.67% rate. The median list price is as of Feb. 1, using Zillow data.)

Refinance applications from homeowners eager to lock in a lower rate dropped 19% from the previous week, according to MBA. The decline was likely due to higher rates.

However, refinance applications were 69% higher than a year ago when rates were higher.

Mortgage rates are expected to come down once oil prices fall, according to New American Funding’s Chief Investment Officer Jason Obradovich.