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U.S. Mortgage Rates Hit Six-Month High and Prices Create Challenges for Homebuyers
Mortgage Rates Reach 6.93%
The average 30-year fixed-rate mortgage climbed to 6.93% this week, its highest level since early July, according to Freddie Mac. This marks a slight increase from last week’s 6.91% and a notable rise from the 6.66% average during the same period a year ago.
Impact of Rising Rates and Elevated Prices
Higher mortgage rates, coupled with persistently elevated home prices, are making housing less affordable for potential buyers. First-time homebuyers, in particular, are feeling the pinch due to a lack of entry-level housing supply.
Economic Trends Driving Mortgage Rates
The continued strength of the U.S. economy has contributed to upward pressure on mortgage rates. U.S. Treasury yields have surged amidst robust economic data and investor concerns over potential inflationary pressures.
Outlook on Housing Affordability
Sam Khater, chief economist at Freddie Mac, stated, “The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability.” The shortage of entry-level homes further compounds the challenges for prospective buyers.