Mortgage rates increased last week, and despite a two-week streak of declines, will likely remain above 7%.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.18%, up from 7.12%. A year ago at this time, the 30-year FRM averaged 6.02%.
The 15-year fixed-rate mortgage slipped, however, down to 6.51% from 6.52%. A year ago, it averaged 5.21%.
“Mortgage rates inched back up this week and remain anchored north of seven percent. The reacceleration of inflation and strength in the economy is keeping mortgage rates elevated,” said Sam Khater, Freddie Mac’s Chief Economist.
The consumer price index saw its biggest monthly gain this year in August, coming in hotter than expected at +0.3% month-over-month.
This heightens the chances of one more rate hike from the Federal Reserve as it tries to bring inflation down to its preferred 2% threshold.
Analysts predict a pause in September followed by hikes in November and possibly December.
That would mean homebuyers have to stomach high rates through the beginning of 2024. While many are content to stay where they are, some Americans will have to move between now and then. Back-to-office mandates have motivated one in ten home sellers to put their homes on the market, with some taking a loss to avoid losing their jobs.
“[P]otential homebuyers can still benefit during these times of high mortgage rates by shopping around for the best rate quote. Freddie Mac research suggests homebuyers can potentially save $600-$1,200 annually by applying for mortgages from multiple lenders,” Khater added.
A LendingTree study found that borrowers can save an average of $84,301 over the lifetime of their loans by shopping around for a mortgage, or $234 a month. The more offers they gathered, the bigger their savings.
“Different lenders have different standards and criteria that they look at when deciding who to lend to,” Jacob Channel, LendingTree senior economist, said. “It’s for that reason that different lenders can offer such drastically different rates to the exact same people.”
Read More Articles:
In-Person Work, Quality Of Life Affects Americans On The Move
Alternative For Credit Invisible Borrowers Finds Success
Low Income Housing Getting Solar Panels, More From Program Established By Inflation Reduction Act
For today’s top stories and to sign up for our newsletter, click here.