Sign In  |  Register  |  About Walnut Creek Guide  |  Contact Us

Walnut Creek, CA
September 01, 2020 1:43pm
7-Day Forecast | Traffic
  • Search Hotels in Walnut Creek Guide

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Mortgage rates climb further, near 23-year high

Freddie Mac reported Thursday that the average interest rate for a 30-year fixed-rate home mortgage is now at 7.31%, the highest it has been in nearly 23 years.

The average rate on the benchmark 30-year fixed mortgage surged again this week, hitting the highest level in nearly 23 years.

Freddie Mac's latest Primary Mortgage Market Survey released Thursday shows that the average rate for a 30-year fixed note climbed to 7.31%, up from 7.19% last week, and from 6.7% a year ago.

The rate on a 15-year mortgage also rose, averaging 6.72% after coming in last week at 6.54%. One year ago, the rate on a 15-year fixed note averaged 5.96%.

"The 30-year fixed-rate mortgage has hit the highest level since the year 2000," said Sam Khater, Freddie Mac’s chief economist. "However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances."

SEE HOW MUCH HIGHER MORTGAGE RATES ARE ACTUALLY COSTING YOU

Indeed, the latest data from the National Association of Realtors found that pending home sales tumbled 7.1% in the U.S. last month, indicating that high housing costs are causing more consumers to balk at making a deal.

Would-be buyers are increasingly being priced out of the market or getting sticker shock, with the median monthly mortgage payment recently hitting an all-time high of $2,632. 

Meanwhile, would-be sellers locked in at much lower mortgage rates are staying put, contributing further to the ongoing inventory shortage that has been driving up home prices ever since the pandemic began.

FED SKIPS AN INTEREST RATE HIKE, BUT HIGH MORTGAGE RATES COULD BE HERE TO STAY

The interest rate-sensitive housing market has cooled rapidly in the wake of the Federal Reserve's aggressive tightening campaign. Policymakers have lifted the benchmark federal funds rate 11 times as they have tried to crush stubborn inflation and slow the economy. 

Officials signaled during their policy-setting meeting last week that another rate hike is on the table this year – and that rates are likely to remain elevated for some time.

"With mortgage rates continuing to exceed 7%, we’ll soon see whether the month-to-month uptick in newly listed homes comes from sellers who are capitulating to current rate conditions or nervous that they needed to act before mortgage rates climbed even higher," said Danielle Hale, chief economist at Realtor.com. 

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Hale added, "Weekly trends suggest that this may be a much-needed acceptance of higher rates, which may indicate some sticking power to the trend."

FOX Business' Megan Henney contributed to this report.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 WalnutCreekGuide.com & California Media Partners, LLC. All rights reserved.