A father hands his young son a moving box inside a home.

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Mortgage rates continue to push higher, but home buyers aren’t spooked. Mortgage applications for home purchases moved 5% higher last week compared to the previous week, and buyer competition remains elevated in many markets.

Even as costs rise, buyers remain focused on their homeownership aspirations. The 30-year fixed-rate mortgage rose to a 5.30% average last week, up from 2.94% just a year ago, Freddie Mac reports.

High inflation and the Fed’s tightening policy are the main drivers behind rising rates, Nadia Evangelou, National Association of REALTORS®’ senior economist and director of forecasting, writes on the association’s blog.

Mortgage rates have risen more than 2 percentage points since the beginning of the year. The monthly mortgage payment has increased by about $520 since the first week of January, when rates averaged 3.2%, Evangelou notes.

Still, “home buyers continue to show resilience even though rising mortgage rates are causing monthly payments to increase by about one-third as compared to a year ago,” says Sam Khater, Freddie Mac’s chief economist. “Several factors are contributing to this dynamic, including the large wave of first-time home buyers looking to realize the dream of homeownership. In the months ahead, we expect monetary policy and inflation to discourage many consumers, weakening purchase demand and decelerating home price growth.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 12:

  • 30-year fixed-rate mortgages: averaged 5.30%, with an average 0.9 point, up from last week’s 5.27% average. Last year at this time, 30-year rates averaged 2.94%.
  • 15-year fixed-rate mortgages: averaged 4.48%, with an average 0.9 point, dropping from last week’s 4.52% average. A year ago, 15-year rates averaged 2.26%.
  • 5-year adjustable-rate mortgages: averaged 3.98%, with an average 0.3 point, rising from last week’s 3.96% average. A year ago, 5-year ARMs averaged 2.59%.

Freddie Mac reports commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.