Mortgage rates are held in check as recession fears mount

After being prodded higher by inflation fears, mortgage rates were dragged down this week by recession concerns.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dropped to 5.7 percent with an average 0.9 point. (A point is a fee paid to a lender equal to 1 percent of the loan amount. It is in addition to the interest rate.) It was 5.81 percent a week ago and 2.98 percent a year ago.

Freddie Mac, the federally chartered mortgage investor, aggregates rates from around 80 lenders across the country to come up with weekly national averages. The survey is based on home purchase mortgages. Rates for refinances may be different. It uses rates for highquality borrowers with strong credit scores and large down payments. Because of the criteria, these rates are not available to every borrower.

The 15-year fixed-rate average also moved lower, falling to 4.83 percent with an average 0.9 point. It was 4.92 percent a week ago and 2.26 percent a year ago. The five-year adjustable rate average rose to 4.5 percent with an average 0.3 point. It was 4.41 percent a week ago and 2.54 percent a year ago.

“The rapid rise in mortgage rates has finally paused, largely due to the countervailing forces of high inflation and the increasing possibility of an economic recession,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “This pause in rate activity should help the housing market rebalance from the breakneck growth of a seller’s market to a more normal pace of home price appreciation.”

Since the start of June, the 30year fixed average jumped 72 basis points before retreating this week. A basis point is 0.01 percentage point. The sharp spike has made homes less affordable and cooled sales, putting a damper on what had been a booming housing market.