Mortgage rates race closer to 4%, highest since May 2019

Feb. 17, 2022 10:12 AM ETDHI, LEN, TOL, PHM, MTH, BLD, XHB, HOMZ, REZBy: Khyathi Dalal, SA News Editor12 Comments

Symbol for decreasing interest rates. Dice with percentage symbols on decreasing high stacks of coins next to a model house.

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  • Led by high inflation and stronger than expected consumer spending, 30-year fixed-rate mortgage averaged 3.92% with an average 0.8 point for the week ending Feb. 17, 2022, up from last week when it averaged 3.69%; higher than 2.81% a year ago, according to the Freddie Mac Primary Mortgage Survey.
  • "The 30-year fixed-rate mortgage is nearing 4%, reaching highs we have not seen since May 2019. As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets," Chief economist Sam Khater commented.
  • 5-year fixed-rate mortgage averaged 3.15% with an average 0.8 point, up from last week when it averaged 2.93% and a year ago at this time, the 15-year FRM averaged 2.21%.
  • 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 2.98% with an average 0.3 point, up from last week when it averaged 2.80% and a year ago at this time, the 5-year ARM averaged 2.77%.
  • "Another year of strong economic growth combined with the Fed's tighter policy stance will put upward pressure on rates, and as the Fed reduces its MBS purchases, we also expect some volatility as other investors step into the market but without the steady purchase flow of the Fed," AVP, economic and industry forecasting at the Mortgage Bankers Association Joel Kan commented.
  • MBA survey for the week ended Feb.11 shows a drop of 5.4% in mortgage applications from prior week; seasonally adjusted refi index fell 8.9% from the previous week, bringing its share of total applications to the lowest level in 19 months.
  • Homebuilding stocks trade in red in early trading hours: (NYSE:DHI), (NYSE:LEN), (NYSE:TOL), (NYSE:PHM), (NYSE:MTH), (NYSE:BLD)
  • ETFs Watch: (NYSEARCA:XHB), (NYSEARCA:HOMZ), (NYSEARCA:REZ)

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