The trend of increased mortgage rates has spilled over to March. According to Freddie Mac’s report, the mortgage rate increased to 6.73% in the first full week of March, compared to 6.65% the week prior.
The mortgage rate on a 30-year fixed mortgage has been on a steady rise and has increased by 0.75 points since February. One of the main reasons for this is an expectancy that the Federal Reserve will continue to be aggressive in interest rate hikes as part of the efforts to cool down the economy and fight inflation.
“Consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out,” said Freddie Mac in their report. “However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”
Mortgage rates hit their peak in November when the 30-year fixed mortgage rate was at 7.08% while the 15-year fixed mortgage rate reached 6.38%. This was followed by a slide to 6.09% and 5.14%, respectively, in early February before the rates began to climb again.
The high mortgage rates will continue to make things hard for homebuyers, who are also forced to navigate a ballooned house market. The average price of a home listing in January was $406,000 before surging to $415,000 the following month.