Demand for housing is falling as mortgage rates stay firmly above 7%.
The 30-year fixed-rate mortgage averaged 7.19% as of Sept. 21, according to data released by Freddie Mac
FMCC,
on Thursday.
That’s up one basis point from the previous week. One basis point is equal to one hundredth of a percentage point. Rates are at their highest levels in a month.
A year ago, the 30-year mortgage rate was averaging 6.29%.
The average rate on the 15-year mortgage was 6.54%, up from 6.51% last week. The 15-year was at 5.44% a year ago.
See: Fed’s ‘golden handcuffs’: Homeowners locked into low mortgage rates don’t want to sell
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data from Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging 7.33% as of midday Thursday.
What Freddie Mac said: “Mortgage rates continue to linger above seven percent as the Federal Reserve paused their interest rate hikes,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“Given these high rates, housing demand is cooling off and now homebuilders are feeling the effect, which could have an impact on the already low housing supply,” he said.
Builder confidence is at a five-month low.
What economists are saying: “Supply may loosen up some as we head to the end of the year, but prospective homebuyers waiting for mortgage rates to come down should expect no major relief until next year,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement.
Lawrence Yun, chief economist at the National Association of Realtors, said he’s expecting rates to go to 8% if the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
keeps climbing and has topped 4.5%.
Read on: Treasury yields head for highest levels in more than a decade after hawkish Fed projections
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