Show summary Hide summary
Mortgage rates climbed for a seventh consecutive week, with the average rate on the benchmark 30-year fixed mortgage rising to 7.4% from 7.28% the previous week, according to Freddie Mac’s latest Primary Mortgage Market Survey released Thursday.
The survey also showed the average rate on a 15-year fixed mortgage increased to 6.73% from last week’s 6.6%. By comparison, the average 30-year rate was about 6.3% a year earlier.
What’s pushing rates higher
Realtor.com senior economist Joel Berner attributed the move in part to upward pressure from the 10-year Treasury yield. “This increase comes amid continued upward pressure from the 10-year Treasury yield, which averaged 5.28% this week, 9 basis points higher than the week before,” Berner said. He added that rising inflation expectations, “a broad bond market selloff, and rising fiscal deficits requiring new debt issuance” are pushing bond yields higher and mortgage rates along with them.
Flight attendants’ union raises safety concerns about Trump’s Washington arch
Amazon to eliminate about 1,000 corporate jobs in stores unit and other areas, report says
Mortgage rates also respond to a range of factors including Federal Reserve policy and geopolitical developments, and they typically track the 10-year Treasury yield. The 10-year yield was reported to be hovering around 5.22% as of Thursday afternoon.
Effects on the housing market
Berner warned that the higher rates are weighing on the housing market. “Pending home sales fell year over year in both August and September even before rates crossed the 7% threshold, and sellers have been forced to cut prices at a rate not seen in four years,” he said. He noted that the increased cost of financing is discouraging buyers already strained by affordability constraints.
At the same time, Berner said buyers who can pay cash are seeing comparatively favorable conditions: “prices [are] down 1.4% year over year and for-sale inventory up 5.4% year over year.” Those shifts reflect a market in which higher borrowing costs are cooling demand while supply has edged higher.
Freddie Mac’s weekly Primary Mortgage Market Survey is widely used as a barometer of average mortgage rates across the U.S., and its Thursday release underscored a broader trend of rising borrowing costs that borrowers and housing-market observers have been monitoring throughout the year.
