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Experts: Rising Rates Won’t Deflate Buyer Demand

October 22, 2021

The 30-year fixed-rate mortgage moved up for the second consecutive week, averaging 3.09%, Freddie Mac reports.

“Mortgage rates continued to rise this week due to the trajectory of both the economy and the pandemic,” says Sam Khater, Freddie Mac’s chief economist. “Even as the availability of existing homes is improving, prices remain high due to home buyer demand and limitation on housing starts and permits resulting from the ongoing labor and material shortages.”

Freddie Mac economists, the National Association of REALTORS®, and other housing groups are projecting the housing market to remain strong for the rest of the year.

Housing demand will continue to be high, even as mortgage rates move higher. NAR is forecasting mortgage rates to average 3.3% for the last quarter of 2021.

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 21:

  • 30-year fixed-rate mortgages: averaged 3.09%, with an average 0.7 point, rising from last week’s 3.05% average. Last year at this time, 30-year rates averaged 2.80%.
  • 15-year fixed-rate mortgages: averaged 2.33%, with an average 0.7 point, increasing from last week’s 2.30% average. A year ago, 15-year ARMs averaged 2.33%.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.54%, with an average 0.3 point, dropping slightly from last week’s 2.55% average. A year ago, 5-year ARMs averaged 2.87%.

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

Source: 
Freddie Mac and “Instant Reaction: Mortgage Rates, Oct. 21, 2021,” National Association of REALTORS® Economists’ Outlook blog (Oct. 21, 2021)