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Homebuyers Are Relying on Discount Points and Rate-Locks to Endure Rising Mortgage Rates

Market Data + Trends

Homebuyers Are Relying on Discount Points and Rate-Locks to Endure Rising Mortgage Rates

As the 30-year fixed-rate mortgage creeps closer to 6%, buyers are locking in rates to avoid more price hikes in the months to come

May 3, 2022
Money, house model, and lock for mortgage rate

Mortgage rates are surging to their highest level in over a decade as the Federal Reserve continues to raise its benchmark rate to control inflation, but homebuyers are finding ways to cope. A growing number of buyers are making higher down payments to lower the amount they have to finance, while those purchasing homes under construction are locking in rates now rather than facing more gains in the near future, reports.

Roughly 75% of customers at mortgage lender Neat Loans opted to pay for discount points in the first quarter to hold onto affordable rates, and many are also paying fees to secure lower rates through rate-lock agreements, a trend likely to grow nationwide as the 30-year fixed-rate mortgage climbs higher.

Jared Hansen, a real-estate agent in Salt Lake County, Utah, said higher rates have pushed about 15 prospective clients off the market this year. Some of those who can still afford to buy are looking at mortgages with lower introductory rates that reset in five, seven or 10 years.

Average rates on adjustable mortgages last week ranged from 3.69% to 5.03%, depending on the loan terms, according to The website’s average rate on a 30-year fixed rate mortgage was 5.22% over the same period.

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