Mortgage Rates Rise for Sixth Straight Week To A New 23-Year High


Key Takeaways

  • The Freddie Mac 30-year fixed-rate mortgage hit 7.63% on the sixth-straight week it’s increased, a fresh 23-year high. 
  • Rates could hit 8% in coming months on the back of a strong labor market, and continued consumer spending.
  • Increasing interest rates are lifting the income level needed to be a first-time homebuyer.

Mortgage rates moved higher again this week, with the average rate on Freddie Mac’s 30-year fixed-rate mortgage reaching 7.63%, the sixth straight week the mortgage rate has climbed. 

This week’s rate is the highest since late 2000, pushing it to another 23-year high as rates continued their recent steady climb. The 30-year fixed-rate mortgage was up from 7.57% last week and from 6.94% at this point last year. 

The 15-year fixed-rate mortgage is also moving higher, reaching 6.92% this week, higher than last week’s 6.89% and last year’s 6.23%.

The climb in mortgage rates can be attributed to retail sales that were stronger than anticipated and continued strength in the labor market, said Jiayi Xu, economist at

“While under typical circumstances, such positive data would be a reason for cheer among investors and businesses, it has now raised concerns regarding the inflation outlook and the likelihood of further Federal Reserve interest rate hikes, which increase the possibility of mortgage rates hitting 8% in the coming months,” Xu said in an analysis.

Higher Mortgage Rates Matter More for First-Time Homebuyers

As the Federal Reserve has continued its campaign of interest rate hikes that are meant to tame inflation, mortgage rates have marched higher along with them. It’s part of a trend that is exacerbating difficulties for first-time homebuyers, who don’t have home equity to leverage, Xu said.

The median listing price for a starter home in September 2023 was $300,000, the same as in September 2022. However, it now takes an annual income of $81,360 to afford a median-priced home, $8,120 more than it was last year, according to Xu.

“With mortgage rates remaining near 20+ year highs in recent weeks, homeowners are hesitant to list their properties, resulting in a continual drop in the number of newly listed homes,” Xu said. “This ongoing trend poses difficulties for prospective first-time home buyers in their quest to find a suitable home.”

Homebuyers aren’t the only ones feeling the pinch of higher mortgage rates, as home builders are also under pressure. 

“Not only are homebuyers feeling the impact of rising rates, but home builders are as well. Incoming data shows that the construction of new homes rebounded in September but as rates keep rising, home builders appear to be losing confidence,” said Sam Khater, Freddie Mac’s Chief Economist. “As a result, we expect construction to trend down in the short-term.”

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