US Mortgage Rates Tick Down After Five Weeks of Increases
Washington, DC – CNN
US mortgage rates have finally seen a decrease after five consecutive weeks of increases. However, rates still remain above 7% due to ongoing inflation concerns.
30-Year Fixed-Rate Mortgage Averages 7.18%
The average rate for a 30-year fixed-rate mortgage was 7.18% for the week ending August 31, according to data from Freddie Mac. This is a slight decrease from the previous week’s rate of 7.23%. Compared to a year ago, the 30-year fixed-rate was 5.66%.
Freddie Mac’s chief economist, Sam Khater, mentioned that the recent volatility in rates makes it challenging to predict future trends. However, September will provide more clarity as the Federal Reserve determines its next steps regarding interest rate hikes.
Mortgage Rates Impact Home Affordability
During the Federal Reserve’s efforts to curb inflation, mortgage rates have spiked. This has led to a significant decline in home affordability, reaching its lowest level in nearly four decades. The combination of higher mortgage financing costs and rising home prices has made buying a home more expensive for potential buyers.
Additionally, the limited number of homes available on the market has contributed to the increase in home prices. Homeowners who secured lower rates in the past are now hesitant to sell their homes, further exacerbating the low inventory issue.
Impact on Home Sales
The combination of low inventory and high costs has resulted in lower home sales compared to the previous year. The tight housing market has made it challenging for prospective buyers to find affordable homes, further dampening the overall sales activity.
This is a developing story and will be updated.