Mortgage Rates Drop Sharply as Recession Fears Rise, Freddie Mac Says

By Dean Seal

Mortgage rates declined sharply this week, with the 30-year fixed-rate mortgage sinking back to mid-May levels as fears of an oncoming recession creep higher, according to housing-finance agency Freddie Mac.

In the week ending Thursday, the average rate on a 30-year fixed-rate mortgage fell to 5.30% from 5.70% last week. A year ago this week, the average rate was 2.90%.

Average 15-year rates were 4.45%, down from 4.83% a week ago. A year ago, the average 15-year fixed-rate mortgage rate was 2.20%.

The average rate on a five-year Treasury-indexed hybrid adjustable-rate mortgage, or ARM, was 4.19%, up from 4.50% last week. A year ago, the five-year ARM averaged 2.52%.

"Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise," said Sam Khater, Freddie Mac's chief economist. "While the drop provides minor relief to buyers, the housing market will continue to normalize if home price growth materially slows due to the combination of low housing affordability and an expected economic slowdown."

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

July 07, 2022 10:14 ET (14:14 GMT)

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