Should Buyers Be Scared That Mortgage Rates Are Rising?

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Mortgage rates are no longer at ultra-low rates below 3% as they were this summer, but housing analysts are reminding house hunters that borrowing costs remain relatively cheap. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.14% this week.

“The yield on the 10-year Treasury note has been trending up due to the decline in new COVID cases, increasing consumer optimism, as well as broadening inflation and persistent shortages,” says Sam Khater, Freddie Mac’s chief economist. “Mortgage rates are also rising, but purchase demand remains firm, showing that latent purchase demand exists among consumers.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 28:

  • 30-year fixed-rate mortgages: averaged 3.14%, with an average 0.7 point, rising from last week’s 3.09% average. A year ago, 30-year rates averaged 2.81%.
  • 15-year fixed-rate mortgages: averaged 2.37%, with an average 0.7 point, increasing from last week’s 2.33% average. A year ago, 15-year rates averaged 2.32%.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.56%, with an average 0.3 point, up from last week’s 2.54% average. Last year at this time, 5-year ARMs averaged 2.88%.

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