An illustration of houses and ladders on horizontal parts of an upward arrow, implying mortgage rates increasing.

Mortgage rates rose this week after the Federal Reserve announced it would accelerate its bond tapering and that three rate hikes would come in 2022. The 30-year fixed-rate mortgage rose to 3.12% this week, Freddie Mac reports.

Rates are largely expected to continue to rise due to the Fed’s recent announcement. But National Association of REALTORS® Senior Economist Nadia Evangelou says home buyers shouldn’t panic. By historical standards, mortgage rates will remain low and under 4% over the next year. In 1980, the average 30-year fixed-rate mortgage was 13.7% and 8% in 2000.

This week “mortgage rates inched up as a result of economic improvement and a shift in monetary policy guidance,” says Sam Khater, Freddie Mac’s chief economist. “While house price growth is slowing, prices remain high due to solid housing demand and low supply. We expect rates to continue to increase into 2022 which may leave some potential home buyers with less room in their budgets on the sideline.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 16:

  • 30-year fixed-rate mortgages: averaged 3.12%, with an average 0.6 point, rising from last week’s 3.10% average. A year ago, 30-year rates averaged 2.67%.
  • 15-year fixed-rate mortgages: averaged 2.34%, with an average 0.7 point, dropping from last week’s 2.38% average. Last year at this time, 15-year rates averaged 2.21%.
  • 5-year Treasury hybrid adjustable-rate mortgages: averaged 2.45%, with an average 0.3 point, unchanged from the previous week. A year ago, 5-year ARMs averaged 2.79%.
Freddie Mac reports average commitment rates along with average fees and points to better reflect the total upfront cost of obtaining the mortgage.
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