Mortgage Rates Rise Above 5% for the First Time Since 2011. Is the Seller’s Market Over?
Mortgage Rates Rise Above 5% for the First Time Since 2011. Is the Seller’s Market Over?
Abstract
Mortgage rates have increased for seven consecutive weeks, creating openings for buyers who have managed to withstand this tough housing market. The average rate on a 30-year fixed-rate mortgage was 5.11% as of the week ending April 21, representing an increase of 11 basis points from the previous week, Freddie Mac reported Thursday. Mortgage rates now stand more than 2 percentage points higher than they were at this time last year. A year ago, mortgage rates were below 3%. The 15-year fixed-rate mortgage rose 21 basis points to an average of 4.38%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.75%, rising six basis points from the previous week. Some economists have suggested that higher mortgage rates could create a "Lock-in" effect, where homeowners are disinclined to sell their current home because it would mean buying a home at a higher interest rate. Many buyers are facing severe affordability constraints due to the combination of rising prices and higher interest rates. "While springtime is typically the busiest home-buying season, the upswing in rates has caused some volatility in demand," Sam Khater, chief economist at Freddie Mac, said in the weekly rate report.