Inflation hasn’t pushed mortgage rates higher because the market believes it’s only temporary, says Freddie Mac chief economist.

MCLEAN, Va. – This week’s average mortgage rates fell a bit more, to 2.93% from last week’s 2.96% for a 30-year, fixed-rate loan, according to Freddie Mac’s weekly update.

In times of rising inflation, mortgage rates begin to rise. However, that hasn’t happened this time, at least so far.

“Mortgage rates continue to drift down as markets concur with the view that inflation increases are temporary,” says Sam Khater, Freddie Mac’s chief economist.

“While mortgage rates are low, purchase demand has weakened over the last couple of months, primarily due to affordability constraints stemming from high home prices,” Khater adds. “With inventory tight, the slowdown in demand has yet to impact prices, meaning the summer will likely remain a strong seller’s market.”

Mortgage rates for the week of June 17, 2021

  • The 30-year fixed-rate mortgage averaged 2.93% with an average 0.7 point for the week, down from last week’s 2.96%. A year ago, the 30-year FRM averaged 3.13%.
  • The 15-year fixed-rate mortgage averaged 2.24% with an average 0.6 point, up slightly from last week’s 2.23%. A year ago, the 15-year FRM averaged 2.58%.
  • The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.52% with an average 0.3 point, down from last week’s 2.55%. A year ago, it averaged 3.09%.

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Author: marlam