U.S. mortgage rates hit 6.51%

Freddie Mac said on May 21 that the average U.S. rate on a 30-year fixed mortgage rose to 6.51%, up from 6.36% a week earlier and the highest level in nearly nine months. The increase landed in the middle of the spring homebuying season, when borrowing costs typically matter most for purchase demand. The government-backed mortgage finance company said the average 15-year fixed rate also rose, to 5.85% from 5.51% the previous week. A year earlier, the 30-year fixed rate averaged 6.86%, Freddie Mac said. ### Where did the 6.51% number come from? Freddie Mac’s weekly Primary Mortgage Market Survey is the source of the 6.51% figure that circulated in market commentary and social posts this week. The survey said the 30-year fixed-rate mortgage averaged 6.51% as of May 21, while the 15-year fixed-rate mortgage averaged 5.85%. The Associated Press reported on May 21 that the 30-year average had reached its highest level in nearly nine months. (freddiemac.com) Freddie Mac chief economist Sam Khater said in the company’s release that rates “continue to increase,” even as they remained below year-ago levels. ### Why are mortgage rates moving up now? The 10-year U.S. Treasury yield, a key benchmark for mortgage pricing, stood at 4.57% on May 20, according to the St. Louis Fed’s FRED database. Mortgage rates do not move one-for-one with Treasury yields, but they generally track the same direction because lenders price home loans off broader bond-market borrowing costs. (apnews.com) Bloomberg reported on May 21 that Treasury yields had risen earlier in the session before reversing lower as oil retreated and hopes grew for an agreement to end the U.S.-Iran war. That intraday volatility followed a recent run-up that had pushed the 10-year note above 4.68% two days earlier, Bloomberg said. (fred.stlouisfed.org) Realtor.com linked the weekly jump in mortgage rates to the rise in the 10-year Treasury yield, which it said had hit a one-year high before easing. That outlet said the average 30-year fixed rate for the week ending May 21 rose 15 basis points from the prior week. ### Is 6.51% the same as today’s mortgage rate? (bloomberg.com) Bankrate, Forbes Advisor and other retail trackers published higher daily consumer averages on May 22 than Freddie Mac’s weekly reading. Bankrate listed an average 30-year fixed mortgage rate of 6.65% on May 22, while Forbes Advisor cited 6.69% using Mortgage Research Center data. (realtor.com) Freddie Mac’s figure is a weekly market average, while lender websites and consumer finance publishers often show daily advertised or quoted rates that can differ by borrower profile, fees, points and timing. NerdWallet, for example, showed a national average 30-year fixed APR of 6.45% as of May 22 at 9:10 a.m. EDT. (bankrate.com) ### What does the move mean for homebuyers? Bankrate said a borrower at a 6.65% average rate would pay about $77.04 per month in principal and interest for every $100,000 borrowed. That was up $1.43 from the prior week on its calculation. Freddie Mac said borrowers can still lower costs by comparing offers from multiple lenders. (nerdwallet.com) The company’s next weekly mortgage survey is scheduled for May 28, according to its archive and publication calendar pages, giving markets another checkpoint if Treasury volatility continues. (freddiemac.com) (bankrate.com)