Mortgage Rates Reach Highest Level Since November 2022 – What This Means for Homeowners
In light of the robust economic figures, mortgage rates have been on the rise in recent weeks. Until the Federal Reserve can rein in inflation, it is probable that interest rates will stay high.[0]
Mortgage rates climbed again last week, while a key measure of housing sentiment dropped back close to the record lows recorded last year. Though inflation has been high, it has begun to decrease, which indicates that mortgage rates and the economy as a whole may improve.[0] 30-year fixed mortgage rates rose to 6.79% – the highest level since November 2022 and 270 basis points higher than a year ago.[1]
In testimony to Congress this week, Federal Reserve Chair Jerome Powell said the central bank is prepared to return to a faster pace of interest-rate hikes if economic indicators keep coming in hot.[2] Consumer spending has fallen in rate-sensitive sectors like housing, leading to compounding challenges of affordability and low inventory for would-be homebuyers.[3]
The Mortgage Bankers Association's (MBA) weekly mortgage applications survey, published Wednesday, revealed that there was a 7.4% rise in mortgage applications from the week prior.[4] 15-year fixed mortgage rates increased 6 basis points on a week-over-week basis, to 5.95% from 5.89%. The 5/1 adjustable-rate mortgage (ARM) increased an average of 2 basis points to 5.75 percent, while the average rate on a 5/1 adjustable rate mortgage (ARM) is 5.86%, an increase of 0.11 percentage points from last week’s 5.75%.[5]
Homeowners who had mortgages taken out in 2019 or earlier could take advantage of the recent fall in interest rates and reduce their costs by refinancing at the lower rates now available. However, when considering a mortgage refinance or purchase, it’s important to take into account closing costs such as appraisal, application, origination and attorney’s fees.[6]
Today, twenty-year mortgage refinance rates have decreased, offering homeowners the chance to save money should they choose to refinance into a longer repayment term. The rates for all other repayment terms remained the same.[7] Those looking to save the most in interest may want to look into 15-year refinancing rates, as they are currently 0.5% lower than rates for a 30-year refinance.
Home buyers aren't the only ones affected by higher rates.[8] Homeowners who obtained low mortgage rates may be required to remain in their current homes.[3]
0. “Today's Mortgage and Refinance Rates: March 9, 2023 | Powell Remarks Push Rates Back Up” Business Insider, 9 Mar. 2023, https://www.businessinsider.com/personal-finance/best-mortgage-refinance-rates-today-thursday-march-9-2023-3
1. “Mortgage Applications Tick Up From 28-Year Lows: Are Buyers Returning, Or Is It Seasonal?” Benzinga, 9 Mar. 2023, https://www.benzinga.com/news/23/03/31279275/mortgage-applications-tick-up-from-28-year-lows-are-buyers-returning-or-is-it-seasonal
2. “US Mortgage Rates Hit Highest Since November at 6.73%” Yahoo Finance, 9 Mar. 2023, https://finance.yahoo.com/news/us-mortgage-rates-hit-highest-170000756.html
3. “Mortgage Rates Rise to 6.73%, the Highest Level Since November” Barron's, 9 Mar. 2023, https://www.barrons.com/articles/mortgage-rates-rise-to-6-73-its-the-highest-level-since-november-7909b02
4. “Mortgage Applications Increase After Several Weeks of Decline” RisMedia.com, 8 Mar. 2023, https://www.rismedia.com/2023/03/08/mortgage-applications-increase-after-several-weeks-decline/
5. “Today’s mortgage rates for March 7, 2023” NJ.com, 7 Mar. 2023, https://www.nj.com/business/2023/03/todays-mortgage-rates-for-march-7-2023.html
6. “Savings window opens: Today's mortgage rates edge down across all terms | March 7, 2023” FOX 7 Austin, 7 Mar. 2023, https://www.fox7austin.com/money/todays-mortgage-rates-march-7-2023
7. “Today's best mortgage deal? 10- and 15-year mortgage rates fall to 6.25% | March 9, 2023” Fox Business, 9 Mar. 2023, https://www.foxbusiness.com/personal-finance/todays-mortgage-rates-march-9-2023
8. “Mortgage rates rise for the fourth straight week to 6.79%” Daily Mail, 8 Mar. 2023, https://www.dailymail.co.uk/news/article-11836527/Mortgage-rates-rise-fourth-straight-week-6-79.html
