All October 19, 2023

Mortgage Interest Rates Upward Trend Continues

  Freddie Mac today ( 10/19/2023) released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.63 percent.

“Mortgage rates continued to approach eight percent this week, further impacting affordability,” said Sam Khater, Freddie Mac’s Chief Economist. “In this environment, it’s important that borrowers shop around with multiple lenders for the best mortgage rate. With research showing down payment is the single largest barrier to first-time homebuyers attaining homeownership, borrowers should also ask their lender about down payment assistance. Launched this week, Freddie Mac’s DPA One® tool helps lenders and homebuyers identify and take advantage of down payment assistance programs nationwide.”

Khater continued, “Not only are homebuyers feeling the impact of rising rates, but home builders are as well. Incoming data shows that the construction of new homes rebounded in September but as rates keep rising, home builders appear to be losing confidence. As a result, we expect construction to trend down in the short-term.”

  • 30-year fixed-rate mortgage averaged 7.63 percent as of October 19, 2023, up from last week when it averaged 7.57 percent. A year ago at this time, the 30-year FRM averaged 6.94 percent.
  • 15-year fixed-rate mortgage averaged 6.92 percent, up from last week when it averaged 6.89 percent. A year ago at this time, the 15-year FRM averaged 6.23 percent.

The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.

The National Association of Realtors Deputy Chief Economist Jessica Lautz had this to say in reaction to today’s survey results.

Since the first week in September, home buyers have faced weekly increases in mortgage interest rates (today’s release shows they are close to the historical average since 1971 of 7.74%). For the typical existing single-family home of $399,200, that means a monthly mortgage payment of $2,262. The typical existing condo of $353,800 means a monthly mortgage payment of $2,004. The latest month’s REALTOR® Confidence Index shows 29% are skipping paying a mortgage and buying via all cash.

Undeniably, many potential home buyers cannot make the typical monthly payment, let alone pay all cash. However, when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data this week, in 2022, the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.

Jessica Lautz