Finance

Mortgage rates push higher with no relief in sight: Freddie Mac

Published

1 year ago

May 2, 2024

Business Finance News

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Homebuyers are looking for ways to lower their costs as high mortgage rates persist. (iStock)

Mortgage rates pushed further into the 7% range as the Federal Reserve seems unlikely to reverse its restrictive policy stance anytime soon, according to Freddie Mac.

The average 30-year fixed-rate mortgage was 7.22% for the week ending May 2, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s an increase from the previous week when it averaged 7.17%. A year ago, the 30-year fixed-rate mortgage averaged 6.39%.

The average rate for a 15-year mortgage was 6.47%, up from 6.44% last week and up from 5.76% last year.

On Wednesday, the Fed announced it would maintain the federal funds rate at 5.25% to 5.5%, where rates have held steady since last July. Fed officials have said in past meetings that they anticipated rate cuts for 2024 but need more confidence that inflation is heading toward the 2% target rate. Fed Chair Jerome Powell reiterated this sentiment on Wednesday and said it would likely take longer for the central bank to gain this confidence when speaking with reporters.

The delay in rate cuts means mortgage rates will likely stay high longer. With no ease in sight, affordability will continue to be a challenge for homebuyers, who also contend with high home prices.

“The 30-year fixed-rate mortgage increased for the fifth consecutive week as we enter the heart of Spring Homebuying Season,” Freddie Mac’s Chief Economist Sam Khater said. “On average, more than one-third of home sales for the entire year occur between March and June. With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon.”

If you are ready to shop for the best rate on a new mortgage, consider visiting an online marketplace like Credible to compare rates and get preapproved with multiple lenders at once.

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How higher rates are impacting housing

Homebuyers are looking for ways to lower their costs as high mortgage rates persist. Recently, there have been an increase in proptech solutions, down payment assistance and even rate buydowns, Percy.AI Founder and CEO Charles Williams said.

“Homebuyers are looking to use whatever incentives they can score,” Williams said. “We expect some of these initiatives to remain even after rates start heading down meaningfully, which is unlikely this year.”

Buyers have also increasingly turned to adjustable-rate mortgages (ARMs) for a discount. Compared to more traditional mortgage products, ARMs offer lower initial interest rates before adjusting to higher rates in the future.

“With affordability remaining a challenge, more prospective buyers are turning to adjustable-rate mortgages to lower their monthly payments in the short-term,” Bob Broeksmit, the Mortgage Bankers Association president and CEO, said. “The ARM share of applications last week reached 7.8% – the highest level this year.”

If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.

HOMEOWNERS COULD SAVE TENS OF THOUSANDS IN DAMAGES BY USING SMART DEVICES

Home prices increase

Buyers waiting for relief from high home prices will have to wait longer. Home prices are now 6.4% above their level last year, up from the 6% increase registered in January, according to the latest S&P CoreLogic Case-Shiller national home price index report.

In fact, Fannie Mae readjusted its home price projection and forecasts upward, forecasting prices to increase 4.8% annually in 2024 and 1.5% in 2025.

“Buyers are mainly waiting to see if prices go down, too, to balance things out,” Williams said. “That is not likely to happen soon. So, buyers who can afford a home are buying, but only if they can outcompete in this crazy market.”

One way to use your home’s equity is through a cash-out refinance to help you pay down debt or fund home improvement projects. Visit Credible to find your personalized interest rate without affecting your credit score.

THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Finance

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Published

5 hours ago

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Business Finance News

Finance

Walmart taps own fintech firm for credit cards after Capital One exit

Published

6 hours ago

June 9, 2025

Business Finance News

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.

Yichuan Cao | Nurphoto | Getty Images

Walmart‘s majority-owned fintech startup OnePay said Monday it was launching a pair of new credit cards for customers of the world’s biggest retailer.

OnePay is partnering with Synchrony, a major behind-the-scenes player in retail cards, which will issue the cards and handle underwriting decisions starting in the fall, the companies said.

OnePay, which was created by Walmart in 2021 with venture firm Ribbit Capital, will handle the customer experience for the card program through its mobile app.

Walmart had leaned on Capital One as the exclusive provider of its credit cards since 2018, but sued the bank in 2023 so that it could exit the relationship years ahead of schedule. At the time, Capital One accused Walmart of seeking to end its partnership so that it could move transactions to OnePay.

The Walmart card program had 10 million customers and roughly $8.5 billion in loans outstanding last year, when the partnership with Capital One ended, according to Fitch Ratings.

For Walmart and its fintech firm, the arrangement shows that, in seeking to quickly scale up in financial services, OnePay is opting to partner with established players rather than going it alone.

In March, OnePay announced that it was tapping Swedish fintech firm Klarna to handle buy now, pay later loans at the retailer, even after testing its own installment loan program.

One-stop shop

In its quest to become a one-stop shop for Americans underserved by traditional banks, OnePay has methodically built out its offerings, which now include debit cards, high-yield savings accounts and a digital wallet with peer-to-peer payments.

OnePay is rolling out two options: a general-purpose credit card that can be used anywhere Mastercard is accepted and a store card that will only allow Walmart purchases.

Customers whose credit profiles don’t allow them to qualify for the general-purpose card will be offered the store card, according to a person with knowledge of the program.

OnePay didn’t yet disclose the rewards expected with the cards, though the general-purpose card is expected to provide a stronger value, said this person, who declined to be identified speaking ahead of the product’s release. The Synchrony partnership was reported earlier by Bloomberg.

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” OnePay CEO Omer Ismail said in the Monday release.

“We’re excited to be partnering with Synchrony to launch a program at Walmart that checks each of those boxes and will help serve millions of people,” Ismail said.