#Pmms freddie mac mac#

Mortgage rates are probably close to the peak for this cycle (depending on inflation) but might rise to the low 6% range if the Fed has to raise rates to 4%.Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.82 percent with an average 0.7 point for the week ending May 21, down from last week when it averaged 4.86 percent. I’ll have much more on the impact of higher mortgage rates on house prices, inventory, new home sales and housing starts.Ĭurrent 30-year mortgage rates are around 5.1% This increase in mortgage rates will decrease the pool of buyers at each price point and will likely slow house price increases. Using the same assumptions, with a 5.0% mortgage rate, this family could afford a $400,000 house - about 17% less. They could afford a $485,000 house with a 2.5% mortgage rate. This is a huge increase, but payments do not double when mortgage rates double.Īssume a family had $100 thousand for a down payment and could afford $2,000 per month in PITI. For this example, principal and interest payments would increase about 35%, and if you include taxes and insurance (PITI), payments will increase about 25%. However, it is important to understand that if mortgage rates double - say from 2.5% to 5.0%, monthly payments do not double. Based on today’s mortgage rates, affordability has declined to levels not seen since the housing bust). Here is a long-term graph of 30-year mortgage rates (Freddie Mac PMMS, March is today’s rate). But rates are up sharply from the recent lows, and my view is the change in rates is what will impact housing (see my post last month: Housing, the Fed, Interest Rates and Inflation Housing is a key transmission mechanism for the FOMC ). Of course, rates are still historically low. (This all depends on inflation and the Fed Funds rate - but I don’t expect rates to move much higher than the current rate - although 6% is possible). There is some variability in the relationship, so we might see rates as high as the low 6% range. Based on the current estimate for the peak Fed Funds rate (3.25% to 4.0%), the 30-year fixed mortgage will likely peak at between 5.0% and 5.7%. When the Fed Funds rate peaks in this cycle, the yield curve will likely be fairly flat - meaning the 10-year treasury yield will be at about the same level as the Fed Funds rate. Goldman Sach’s chief economist Jan Hatzius recently said he thinks the Fed may have to raise rates above 4%, although their baseline forecast is just about 3%. How high will mortgage rates rise?Ĭurrently most forecasts are for the Fed Funds rate to rise to around 3.25%. “The increase in mortgage rates has softened purchase activity such that the monthly payment for those looking to buy a home has risen by at least 20 percent from a year ago.”Īll of these measures move together over time (and the Freddie Mac PMMS is used for historical data), however when rates are moving quickly, is the most up to date.

“Mortgage rates have increased 1.5 percentage points over the last three months alone, the fastest three-month rise since May of 1994,” said Sam Khater, Freddie Mac’s Chief Economist.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.13 percent from 4.90 percent, with points increasing to 0.63 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.įreddie Mac … released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 4.72 percent. The Mortgage Bankers Association’s (MBA) reported this morning that as of April 8th: reports current 30-year fixed mortgage rates are at 5.12% for top tier scenarios.