The average rate for a 30-year fixed-rate mortgage climbed to 3.09 percent for the week ending March 18, an increase from the 3.01 percent it averaged last week and a sign that rates are continuing to inch up. The increase is cutting further into home affordability as prices boom.
“As expected, mortgage rates continued to inch up but are still hovering around three percent, keeping interested buyers in the market,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “However, residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers.”
Despite the increase, rates are still far below where they were at this time last year. During the same week in March 2019, the average rate for a 30-year fixed-rate mortgage was 3.65 percent.
The average rate for the 30-year fixed-rate mortgage fell below 3 percent in July 2020, for the first time since Freddie Mac began tracking the data more than 50 years ago.
The 15-year fixed-rate mortgage climbed up to an average of 2.40 percent last week from 2.38 percent the week prior. At this time last year, it averaged 3.06 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage, meanwhile, was up slightly to an average of 2.79 percent. A year ago at this time, it averaged 3.11 percent.
Despite the small uptick, rates still remain historically low and will likely stay that way as the U.S. Federal Reserve signaled Wednesday that target interest rates will stay at zero for the near term.