Mortgage rates inched up last week, slowing to a crawl as they get closer to a 7% average, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.94%, up from 6.92%.
This is a slowdown for rates, which the week prior jumped from 6.66% to 6.92%.
A year ago at this time, the 30-year FRM averaged 3.09%.
“Mortgage rates slowed their upward trajectory this week,” said Sam Khater, Freddie Mac’s Chief Economist.
“The 30-year fixed-rate mortgage continues to remain just shy of seven percent and is adversely impacting the housing market in the form of declining demand. Additionally, homebuilder confidence has dropped to half what it was just six months ago and construction, particularly single-family residential construction, continues to slow down.”
Housing starts dropped 8.1% in September to a seasonally adjusted annual rate of 1.44 million units.
Builder confidence is now at its lowest level since August 2012, with the exception of the onset of the pandemic in the spring of 2020.
“This will be the first year since 2011 to see a decline for single-family starts,” said NAHB Chief Economist Robert Dietz.
“While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers.”
Raymond James analysts Buck Horne and Tousley Hyde downgraded shares for several homebuilders this week, including KB Homes and M.D.C. holdings, saying rising rates have “crippled” housing affordability. Shares for those companies all fell by at least 1%.
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 6.23% with an average 1.1 point.
- A year ago at this time, the 15-year FRM averaged 2.33%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.71%, dropping from last week’s 5.81%, with an average 0.4 point.
- A year ago at this time, the 5-year ARM averaged 2.54%.
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