Mortgage rates hit a more than two-decade high last week, exacerbating creeping financial troubles for many would-be buyers.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.31%, jumping from 7.19%. A year ago at this time, the 30-year FRM averaged 6.70%.
The 15-year fixed-rate rose to 6.72% from 6.54%. A year ago, it averaged 5.96%
“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” Sam Khater, Freddie Mac’s Chief Economist, said.
“However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”
Pending home sales tanked in August, reversing a two-month trend of increases, as high rates and soaring home prices push monthly payments to untenable levels for many Americans.
As fall rolls in, potential buyers face even more economic stress.
Interest rates aren’t likely to sink any time soon, as the Federal Reserve hints at another interest rate hike before year-end.
The return of student loan payments is expected to hit hard. Nearly half of borrowers are extremely or very stressed about resuming their payments, while 28% say they will have to take on new debt to manage their personal finances.
To make matters worse, a recent survey found that 60% of Americans report living paycheck-to-paycheck, regardless of their income level, and almost half say their finances fluctuate seasonally.
With the holiday season taking its toll, consumers cite the winter months as their most unstable by far, making home shopping or saving for a downpayment unsustainable.
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