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Mortgage rates are climbing again after briefly dipping below 6% about a month ago. Even so, rates remain lower than this time last year—still offering some relief to buyers searching for greater affordability.
But uncertainty may be weighing on demand. Mortgage applications for home purchases—a key indicator of future buying activity—have lost the double-digit annual gains seen earlier this year. In the latest week, purchase applications rose just 1% year-over-year and fell 3% from the previous week, according to the Mortgage Bankers Association.
The 30-year fixed-rate mortgage averaged 6.46% this week, according to Freddie Mac.
“Purchase applications for FHA and VA loans continue to hold up better than those for conventional buyers,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association. Still, he notes that the recent jump in rates, combined with broader economic uncertainty, is “having an impact on buyer confidence.”
But volatility in mortgage rates is nothing new.
“There’s always going to be swings in mortgage rates,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “Home buyers should have a good mortgage broker they’re working with who can keep in touch with them on what’s going on with mortgage interest rates.”
Small Rate Changes, Modest Payment Impact
While any rate increases can feel significant, their impact on monthly payments may be less dramatic than what many buyers expect. For example, the difference between last month’s 5.98% average versus this week’s 6.46% average on a $300,000, 30-year fixed-rate mortgage amounts to about $90 more per month.
Economists say rate-sensitive buyers should comparison shop.
“With spring homebuying season in full swing, aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes,” says Sam Khater, Freddie Mac’s chief economist.
Related: 6 Ways Your Buyers Can Save on Their Mortgage
Mortgage Rates This Week
Freddie Mac reports the following national averages with mortgage rates for the week ending April 2:
- 30-year fixed-rate mortgages: averaged 6.46%, rising from last week’s 6.38% average. A year ago, rates averaged 6.64%.
- 15-year fixed-rate mortgages: averaged 5.77%, up slightly from last week’s 5.75% average. Last year at this time, 15-year rates averaged 5.82%.