The average interest rate on a 30-year mortgage rose to 6.95% last week. (iStock )
Mortgage rates rose sharply this week, hovering near 7%. The jump ended a string of declines this week. Rates on a 30-year fixed-rate mortgage averaged 6.95%. Freddie Mac is.
“Mortgage rates rose this week, to just below 7 percent,” explained Sam Carter, chief economist at Freddie Mac. “New home sales and sales agreements are both down, while the number of homes for sale is increasing. We expect rates to continue to decline slowly over the rest of the year, and higher inventory should moderate price increases, which bodes well for potential homebuyers.”
Rates are up from an average of 6.86% last week. Last year, rates were slightly lower than they are now, with the rate for a 30-year mortgage at 6.81%.
Buyers considering a 15-year mortgage also saw an increase in average interest rates last week, with fixed-rate mortgage rates rising to 6.25% from 6.16% last week. Rates this week were roughly the same as last year, when they were 6.24%.
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The “sandwich generation” is more likely to buy a home than other generations
While nearly every generation struggles with the high cost of buying a home, a sub-generation known as the “sandwich generation” is getting help along the way. Realtor.com reported.
This generation makes up about 17% of Americans and is made up of people who are simultaneously caring for children and parents or grandparents.
“Unfortunately, affordability remains a major challenge for homebuyers in today’s housing market, but for the Sandwich Generation, family support is helping them financially,” said Laura Eddy, vice president of research and insights at Realtor.com.
Thirty percent of people surveyed by Realtor.com said financial assistance from older family members living in their home helped them buy a home. However, another 30% said the opposite happened: having an additional family member living in their home made it harder for them to get a mortgage.
“It’s not uncommon for people to assume responsibility for managing an aging or deceased family member’s home and ultimately inherit the home after that person passes away,” said Kendall Bonner, a housing expert at Realtor.com.
“Given today’s rising home values and current lending rates, real estate investing can be a very profitable way to enter the housing market, especially for those who do not currently own a home. Real estate investing continues to be one of the most stable ways to build intergenerational wealth,” Bonner said.
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Home prices hit record high
Recently, both interest rates and home prices have been rising again, creating an unaffordable market for many would-be buyers.
The average sales price of a U.S. home was $397,954, up 4.9% from a year ago. Redfin Report Found. This is the biggest price increase since March. Asking prices in June increased slightly on average, starting at $409,975, but this is the biggest increase since October 2022.
Rising prices and interest rates led to a 4.6% drop in sales contracts in June to just 87,160. While sales may be down, listings are up, mainly due to seasonality. New listings reached 100,989, up a healthy 9.9% year over year and the largest increase in two months.
Several Texas cities saw slight price declines compared to last year, according to Redfin. The average home price in Austin fell 2.1% and in Dallas it was down 1.5%. San Antonio also saw a drop in prices, but only by 0.2%.
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