Mortgage Rates Slide Lower With Demand Drop on the Horizon

By Dean Seal

Mortgage rates slipped lower this week as the housing market continues to moderate from this year's surge in home prices and sharp rate increases, housing-finance agency Freddie Mac said.

In the week ending Thursday, the average rate on a 30-year fixed-rate mortgage fell to 5.13% from 5.22% last week. A year ago this week, the average rate was 2.86%.

Average 15-year rates were 4.55%, down from 4.59% a week ago, Freddie Mac said. A year ago, the average 15-year fixed-rate mortgage rate was 2.16%.

The average rate on a five-year Treasury-indexed hybrid adjustable-rate mortgage, or ARM, was 4.39%, down from 4.43% last week. A year ago, the five-year ARM averaged 2.44%.

"Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year," said Sam Khater, Freddie Mac's Chief Economist. "The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability.

"As a result, over the rest of the year purchase demand likely will continue to drag, supply will modestly increase, and home price growth will decelerate," he said.

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

(END) Dow Jones Newswires

August 18, 2022 10:23 ET (14:23 GMT)

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