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Mortgage rates are inching higher, but prospective home buyers needn’t be too spooked: Rates are still more than one percentage point lower than a year ago.
The 30-year fixed-rate mortgage averaged 6.44% this week, Freddie Mac reports. It marks the third consecutive week that rates have risen. Meanwhile, mortgage applications for home purchases dropped 7% in the last week as mortgage rates hit the highest level since August, the Mortgage Bankers Association reported this week.
Higher mortgage rates may be a thorn for prospective home buyers, but Sam Khater, Freddie Mac’s chief economist, says that’s not necessarily a bad sign for the economy. “In general, higher rates reflect the strength in the economy that is supportive of the housing market,” Khater says.
Still, buyers remain cautious. Even as more homes are available on the market, they still face high home prices. Buyers will want to shop around for mortgage rates, Khater says. “Rates can vary widely between mortgage lenders,” he adds.
Freddie Mac reports the following national averages for mortgage rates for the week ending Oct. 17:
- 30-year fixed-rate mortgages: averaged 6.44%, up from last week’s 6.32% average. A year ago, 30-year rates averaged 7.63%.
- 15-year fixed-rate mortgages: averaged 5.63%, rising from last week’s 5.41% average. Last year at this time, 15-year rates averaged 6.92%.
