Mortgage rates near 4%, and even surpass it in many areas, data shows

Mortgage rates surged to nearly 4% over the past week, according to Freddie Mac. And data shows that some areas are already seeing rates surpass the 4% mark.

The average 30-year mortgage rose to 3.92% annual percentage rate (APR) for the week ending Feb. 17, according to Freddie Mac’s Primary Mortgage Market Survey. This is up from 3.69% last week and 2.81% from the same time last year. 

Shorter mortgage types also saw rate increases this week. The 15-year fixed-rate mortgage rose to 3.15%, up from 2.93% last week and 2.21% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) rose to 2.98%, up from 2.8% last week and 2.77% last year.

"Mortgage rates jumped again due to high inflation and stronger than expected consumer spending," Freddie Mac Chief Economist Sam Khater said. "The 30-year fixed-rate mortgage is nearing 4%, reaching highs we have not seen since May 2019. As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets."

If you want to take advantage of interest rates before they rise further, you could consider refinancing your mortgage to lower your monthly payments and save money over the life of the loan. Visit Credible to find your personalized interest rate without affecting your credit score.

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Interest rates in some areas rise above 4%

In some areas of the U.S., borrowers are already seeing mortgage rates surpassing the 4% mark, data from the Consumer Financial Protection Bureau (CFPB) showed. For example, in many states, most mortgage lenders are offering average rates of 4.375% to buyers when their credit scores are between 700 and 719 and their down payment is 10%. 

Because mortgage rates are moving up quickly, some lenders are securing a mortgage rate lock for their borrower’s rates as soon as possible.

"We have been playing it safe and locking in borrowers' interest rates as soon as we can," Movement Mortgage Senior Loan Officer Mark Wilkins said. "Rates in the low 4s and high 3s are still great rates though and we have been spoiled with rates in the high 2s and low 3s for the past couple years."

If you are looking to purchase a home or refinance your current loan with a lower interest rate, visit Credible to compare multiple mortgage lenders at once and choose the one with the best rate and loan terms for you.

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Fed rate hike likely to push rates higher

The Federal Reserve will hold its next meeting in March, where it is expected to raise the federal funds rate by up to 50 basis points. This rate hike could drive interest rates even higher. 

"The Freddie Mac fixed rate for a 30-year loan continued to climb this week, hitting 3.92%, the highest rate since May 2019," Realtor.com Chief Economist Danielle Hale said. "This rise followed along with 10-year Treasuries which are on track to exceed 2% for the first week since July 2019. Persistent inflation coupled with strong recent economic reports has raised market expectations of a 50 basis point Fed funds rate hike in March, pushing longer-term rates up in anticipation of this possibility."

If you want to take advantage of the current mortgage rates before they rise further, you could consider refinancing your home loan to get a lower interest rate and reduce your monthly mortgage payments. Contact Credible to speak to a home loan expert and get all of your questions answered.

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