Surging Rates and Home Prices Pressure Homebuyers

Mortgage Rates at 20+ Year Peak, Straining Homebuyers
Source: Pixabay

Mortgage rates have risen for the third consecutive week, reflecting a strengthening U.S. economy characterized by low unemployment and robust wage growth.

Freddie Mac’s data, released on Thursday, revealed that the 30-year fixed-rate mortgage reached an average of 6.96% as of August 10th. This marks a 6 basis point increase from the previous week, where each basis point equates to one-hundredth of a percentage point. This rise follows the prior week’s rate of 6.9%.

Similarly, the average rate for the 15-year mortgage also climbed from 6.25% to 6.34% in the previous week. A year ago, the 15-year mortgage stood at 4.59%.

The compilation of Freddie Mac’s weekly mortgage rate report is based on a multitude of applications submitted by lenders nationwide when prospective borrowers apply for mortgage loans. In contrast, data from Mortgage News Daily indicated a 30-year fixed-rate mortgage average of 7.05% as of Thursday afternoon.

Freddie Mac’s Chief Economist, Sam Khater, noted, “There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again.” This observation was conveyed in a statement provided by Freddie Mac.