30-year mortgage rates soar to 6.7%, highest in 15 years

Refinance applications are down an astonishing 82% from one year ago, while home-purchase mortgages fell 29%.

By JEFF LAZERSON | jlazerson@mortgagegrader.com | MortgageGrader.com | October 03, 2022

* Article originally posted in Orange County Register on September 29, 2022

Freddie Mac’s average 30-year fixed rate soared to 6.7% this week, almost one-half point higher than last week’s 6.29% rate and more than double the 3.01% rate from one year ago.

The last time Freddie recorded average rates this high was July 19, 2007, more than 15 years ago.

Refinance mortgage applications have almost vanished, dropping 84% from a year ago, according to the Mortgage Bankers Association. Purchase applications are down 29% from a year ago.

Are there are any home lending uptick trends?

Yes.

The adjustable-rate mortgage share increased to 10.4% of all applications, according to the MBA. One year ago, ARMs were just 3.4% of total applications.

Another bolt of business is the home equity lines-of-credit and closed-end second mortgage business. For the second quarter of the year, $72 billion of second liens were originated — 50% more than the same quarter one year ago, according to Inside Mortgage Finance.

Brace yourself. Next week might very well find us at 7% on the 30-year fixed and 6% for a 15-year fixed, which stood at 5.96% this week.

Freddie Mac rate news: The 30-year fixed rate averaged 6.7%, 41 basis points higher than last week. The 15-year fixed rate averaged 5.96%, 52 basis points higher than last week.

The Mortgage Bankers Association reported a 3.7% mortgage application decrease from the previous week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $647,200 loan, last year’s payment was $1,444 less than this week’s payment of $4,176.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.875%, a 15-year conventional at 5.875%, a 30-year conventional at 6.25%, a 15-year conventional high-balance ($647,201 to $970,800) at 5.99%, a 30-year conventional high-balance at 6.875% and a 30-year purchase jumbo at 6.125%.

Eye catcher loan of the week: A 30-year jumbo purchase mortgage locked at 5.875% for the first seven years interest-only without points.

Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or jlazerson@mortgagegrader.com. His website is www.mortgagegrader.com.

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* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.