A strengthening economy and rising bond yields are pushing rates higher
of ConsumerAffairs
Mortgage rates are headed higher again and some experts think its not impossible that the key 30-year rate will approach 7% again, after falling to a low of 6.09%.
Freddie Mac repoprts its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.54% this week, the first time its been over 6.5% in a month.
The continued strength in the economy drove mortgage rates higher once again this week, said Sam Khater, Freddie Macs chief economist.
"Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy.
The rise in rates has happened fairly quickly. The 30-year fixed-rate mortgage has increased 72 basis points in October alone. That takes more homes out of the affordable range since home prices also continue to rise, according to the National Association of Realtors.
Not as many people applying for mortgages
With higher rates, fewer consumers are applying for mortgages. The Mortgage Bankers Association (MBA) reports applications dropped by 6.7% from the previous week. But Joel Kan, MBAs vice president and deputy chief economist, says the higher rates arent deterring all buyers.
Purchase applications continued to run stronger than last years pace for the fifth consecutive week, Kan said. Even though rates have been on a recent upswing, they are over a full percentage point lower than a year ago, which has kept some homebuyers in the market.
He also notes that the inventory of homes for sale has started to loosen, and home-price growth has eased in some markets, providing more options for buyers in combination with these lower rates.
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Posted: 2024-10-24 16:19:47
