The average rate on a 30-year fixed-rate mortgage was 5% as of the week ending April 14, representing an increase of 28 basis points from the previous week, Freddie Mac FMCC, -1.86% reported Thursday. One basis point is equal to one hundredth of a percentage point, or 1% of 1%.
“As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation,” Sam Khater, chief economist at Freddie Mac, said in the report. Indeed, data from the Mortgage Bankers Association in recent weeks has shown a downturn in applications for mortgages backed by the Federal Housing Administration, which economists see as an indication that first-time home buyers are being pushed out of the market. FHA loans are more popular with first-time buyers because they have less onerous eligibility requirements in terms of down payments and credit scores than loans backed by Fannie Mae FNMA, +1.
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