Mortgage rates stayed above 7% again last week.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.19%, up from 7.18%. A year ago at this time, the 30-year FRM averaged 6.29%.
The 15-year fixed-rate rose to 6.54% from 6.51%. A year ago, it averaged 5.44%
“Mortgage rates continue to linger above 7% as the Federal Reserve paused their interest rate hikes,” said Sam Khater, Freddie Mac’s Chief Economist.
“Given these high rates, housing demand is cooling off and now homebuilders are feeling the effect. Builder sentiment declined for the first time in several months and construction levels have dipped to a three-year low, which could have an impact on the already low housing supply.”
August’s inventory of unsold homes fell 0.9% to 1.1 million, putting further pressure on homebuyers competing for affordable houses.
Prices are soaring at the same time, seeing gains all over the country. The median price for an existing home is now up to $407,100.
“High mortgage rates above 7% combined with low resale inventory and higher home prices are slowing housing production, as many first-time home buyers and younger households are struggling to purchase an affordable home,” Alicia Huey, chairman of the National Association of Home Builders, said.
The catch-22, however, is that housing needs to “essentially double” in order to bring prices down to earth, according to NAR Chief Economist Lawrence Yun.
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