Mortgage rates take a breather as the sector cools

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The 30-year fixed-rate mortgage was averaging 5.7% for the week ending June 30, according to data released by Freddie Mac on Thursday. This is a drop of 11 basis points from the previous week: one basis point is equal to one hundredth of a percentage point, or 1% of the 1%.

The average fixed-rate mortgage at 15 years fell 9 basis points over the past week to 4.83%. On the other hand, the 5-year adjustable-rate hybrid mortgage indexed to the Treasury averaged 4.5%, 9 basis points more than the previous week.

“The rapid rise in mortgage rates has finally stopped,” Sam Khater, chief economist at Freddie Mac, said in a press release, “largely due to the compensatory forces of high inflation and growing possibility of an economic recession. “

The break should help the housing market to “rebalance” and help buyers, he added, slowing the “dizzying growth of a seller’s market at a more normal pace of price appreciation.” housing “.

The 30-year rate was 2.98% at the same time last year.

Higher mortgage rates are pushing potential buyers to wait to buy homes, as the cost of borrowing increases. For an existing home with an average price of $ 407,600, with a 10% down payment and a 30-year fixed-rate mortgage, the increase in loan costs since last year would be approximately $ 590, according to a Bankrate calculator.

Mortgage applications, a sign of demand, rose slightly during the week ending June 24, according to the Association of Mortgage Bankers, driven by refinancing of conventional loans.

The performance of the 10-year Treasury note TMUBMUSD10Y,
fell to 3.024% during the morning trading session.

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