Mortgage rates continue to climb: 30-year loan at 6.50%

Freddie Mac points to reasons behind the increase.

Freddie Mac’s Primary Mortgage Market Survey has revealed a rise in mortgage rates, with the 30-year fixed-rate mortgage averaging 6.50% as of February 23, 2023.

This represents a notable increase from the previous week’s average of 6.32% and a significant jump from the 3.89% recorded at the same time last year. The 15-year fixed-rate mortgage has also seen an uptick, averaging 5.76%, up from last week’s 5.51%.

Sam Khater, chief economist of Freddie Mac, said interest rates are repricing to account for the stronger-than-expected economic growth, tight labor market, and the threat of inflation. Khater recommends that homebuyers shop around among lenders to save on their mortgage.

“Our research shows that rate dispersion increases as mortgage rates trend up,” he said. “This means homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate.”

Homebuyer affordability declined in January, according to the Mortgage Bankers Association. The national median payment applied for by purchase applicants rose 2.3% to $1,964.

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