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Mortgage rates rose significantly this week, and demand fell for the second week in a row.
Freddie Mac's latest Primary Mortgage Market Study, released Thursday, found that the average benchmark interest rate 30 year fixed mortgage It rose to 6.32% from 6.12% last week. A year ago, the average interest rate on a 30-year loan was 7.57%.
A “For Sale” sign is posted on a house in Philadelphia on August 16th. (Joe Lamberti/Bloomberg via Getty Images/Getty Images)
“30-year fixed-rate mortgages posted their largest single-week increase since April, following the release of the better-than-expected September jobs report,” said Sam Cater, chief economist at Freddie Mac.
Housing turnover rate is at its lowest level in 30 years
“However, it is important to remember that the rise in interest rates is primarily due to changes in expectations and not due to the underlying economy, which has been strong through most of this year,” Carter continued. “While rising interest rates will make home affordability more difficult, this is a sign of economic strength that should continue to support the housing market recovery.”
Housing market activity is hampered by the ongoing affordability crisis due to low inventory, high mortgage rates, and soaring home prices. (Tammy Yungblud/Kansas City Star/Tribune News Service via Getty Images/Getty Images)
Many buyers and sellers are waiting to see if interest rates will fall further. According to Zillow research, about 80% of mortgage holders currently have interest rates below 5%.
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The average interest rate for 15-year fixed mortgages also rose to 5.41% from 5.25% last week. A year ago, the average interest rate on a 15-year term bond was 6.89%.
