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Mortgage rates rise back above 7%

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Mortgage rates bounce back above 7% after falling last week.

According to Freddie Mac, the average rate on 30-year fixed-rate mortgages was 7.08% for the week ending November 10, up from 6.95% the week before. A year ago, the 30-year fixed rate was 2.98%.

Mortgage rates have been rising through most of 2022 as the Federal Reserve (Fed) launched an unprecedented rate-hiking campaign to curb sharp inflation.

last week, Federal Reserve announced That would raise rates by another 75 basis points, making it the sixth rate hike this year and the fourth consecutive hike of that magnitude. While the Labor Department announced Thursday, Consumer prices rose 7.7% in October Although lower than expected compared to a year ago, the Fed still has more work to do to keep inflation under control.

Freddie Mac Chief Economist Sam Cater said: “Home sales have fallen significantly and are not expected to improve as we approach the end of the year.”

The Federal Reserve does not directly set the rate borrowers pay on mortgages, but its actions affect them. is in When investors see or anticipate rate hikes, yields move higher and mortgage rates move higher.

With mortgage rates up 4 percentage points from a year ago, buyers’ purchasing power has plummeted. This has pushed many buyers out of the market, and those who remain either consider lower price points or compromise on location, size or home condition in order to find affordable homes. may be necessary.

“The key to making the right decisions in this challenging housing market is to focus on what you need now and in the years to come so that you can stay in your home long enough that buying is a sound financial decision. “It’s about guessing,” said Daniel. Realtor.com chief his economist Hale said:

Based on September 2021 median home prices and fixed 30-year mortgage rates, the typical homebuyer with a 20% down payment was looking at $1,187 a month last year, according to Freddie Mac calculations. That’s what it means.

With rising prices and mortgage rates hovering around 7% this year, the typical buyer faces a monthly payment of $2,065. That’s $878 more per month.

As the cost of financing housing has changed significantly, sales fell For the eighth straight month, only 16% of people think now is a good time to buy a home, a record low, according to the National Association of Realtors.

But last week’s mortgage applications rose slightly for the first time in six weeks, according to the Mortgage Bankers Association, indicating some people are still buying homes.

MBA President and CEO Bob Broeksmit said: “Many potential buyers are not just waiting for mortgage rate volatility to subside, they are waiting for a clearer picture of the economic outlook.”

According to Freddie Mac, the average mortgage interest rate is based on a survey of traditional homebuying loans to high-credit borrowers with a 20% down payment. However, many buyers with lower upfront payments or less than perfect credit will pay more.

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