Mortgage rates advance toward 8%

Mortgage rates continued to climb last week amid a stronger-than-expected economy and geopolitical uncertainty in the Middle East.

The 30-year fixed-rate mortgage averaged 7.63% in the week ending October 19, up from 7.57% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 6.94%.

“Mortgage rates continued to approach 8% this week, further impacting affordability,” said Sam Khater, Freddie Mac’s chief economist, in a statement.

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. A current buyer’s rate may be different.

Not only are homebuyers feeling the impact of rising rates, but home builders are as well, Khater said.

“Construction of new homes rebounded in September but as rates keep rising, home builders appear to be losing confidence,” he said. “As a result, we expect construction to trend down in the short-term.”

That will further hurt inventory levels, and the low inventory of homes to buy is one of the main reasons prices are staying as high as they are right now.

‘Higher for longer’

Mortgage rates have spiked during the Federal Reserve’s historic inflation-curbing campaign — and while a good deal of progress has been made since June 2022, when inflation hit 9.1%, Fed officials say there is still a ways to go.

The Fed’s preferred inflation measure, the core Personal Consumption Expenditures index, is currently 3.9%, which is nearly double the Fed’s target of 2%. But it is the lowest annual increase that index has seen in two years and is seen as a positive step toward the Fed’s target. The next rate-setting meeting by the Federal Reserve will be October 31 and November 1.

Rates this week averaged higher as investors reacted to hotter-than-expected retail sales data and a stronger-than-expected labor market in September.

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – swifttelecast.com. The content will be deleted within 24 hours.

Leave a Comment