Mortgage Rates Rise on Signs of Strong Economic Growth

As borrowing costs increase, rate dispersion among lenders is growing. Your clients could save up to $1,200 annually by shopping around, experts say.

Mortgage rates are inching up, with the 30-year fixed-rate loan increasing to a 6.5% average last  week, Freddie Mac reports. Homeownership remains attainable for Americans who can afford a 20% down payment and a monthly mortgage payment of $1,880 on a median-priced home, says Nadia Evangelou, senior economist and director of real estate research at the National Association of REALTORS®.

“The economy continues to show strength, and interest rates are repricing to account for the stronger than expected growth, tight labor market and the threat of sticky inflation,” says Sam Khater, Freddie Mac’s chief economist. “Our research shows that rate dispersion increases as mortgage rates trend up. This means home buyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate.”

Freddie Mac reported the following national averages in mortgage rates for the week ending Feb. 23:

• 30-year fixed-rate mortgages: averaged 6.50%, rising from last week’s 6.32% average. Last year at this time, 30-year rates averaged 3.89%.
• 15-year fixed-rate mortgages: averaged 5.76%, increasing from last week’s 5.51% average. A year ago, 15-year rates averaged 3.14%.