Mortgage rates rose again this week, continuing their upward march and contributing further to plummeting demand in the housing market as more would-be buyers retreat.
Freddie Mac’s latest Primary Mortgage Market Survey released Thursday shows the average rate for the benchmark 30-year fixed-rate mortgage jumped to 7.49%, up from 7.31% last week and from 6.66% a year ago.
The rate for a 15-year mortgage also climbed, averaging 6.78% after coming in last week at 6.72%. One year ago, the rate on a 15-year fixed note averaged 5.9%.
“Mortgage rates maintained their upward trajectory as the 10-year Treasury yield, a key benchmark, climbed,” Freddie Mac chief economist Sam Khater said in a statement . “Several factors, including shifts in inflation, the job market and uncertainty around the Federal Reserve’s next move, are contributing to the highest mortgage rates in a generation. Unsurprisingly, this is pulling back homebuyer demand.”
SEE HOW MUCH HIGHER MORTGAGE RATES ARE ACTUALLY COSTING YOU
The Mortgage Bankers Association reported Wednesday home-purchase applications tumbled 6% to a nearly three-decade low last week. The data shows application volume is down 22% compared with the same time last year.
Housing affordability in the U.S. reached an all-time low this summer, and continues to get worse.
HOMES ARE NOW UNAFFORDABLE IN 99% OF THE US FOR AVERAGE AMERICANS
Typically, in a market where interest rates rise as fast they have under the Fed’s aggressive rate-hike campaign, home prices would be expected to pull back. But prices remain high due to a lack of homes for sale as more homeowners who are locked in at lower interest rates stay put rather than sell.
Realtor.com’s September housing report released this week shows home prices rose for the second month in a row on an annual basis, while the number of homes on the market fell for the third consecutive month. However, there was a month-over-month increase in listing price reductions.
“An uptick in homes with reduced prices is a small break for buyers on top of the usual seasonal factors that align to make this first week in October the best week to buy. Yet, the larger context remains challenging,” Realtor.com chief economist Danielle Hale said. “Buyers still struggle with the triple threat of rising listing prices, record-high mortgage rates, and limited inventory, making affordability a continued concern.”
FOX Business’ Megan Henney contributed to this report.
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