The upward trend of U.S. mortgage rates continues as the 30-year fixed-rate mortgage hits its highest level since 2001. According to data released by Freddie Mac on August 24, the 30-year fixed-rate mortgage now stands at an average of 7.23%, which is a 14 basis point increase from the previous week.
Rising Mortgage Rates
This surge marks the fifth consecutive week of increased rates, emphasizing the ongoing upward pressure on rates in the short-term. Sam Khater, the chief economist at Freddie Mac, stated that indications of ongoing economic strength contributed to this rise in mortgage rates. As a result, existing home sales continue to decrease due to high rates and a lack of available inventory, while new home sales have shown modest improvements.
Compared to a year ago, the 30-year fixed-rate mortgage has seen a significant jump, averaging at 5.55%. Similarly, the average rate for the 15-year mortgage rose from 6.46% to 6.55% over the past week. In contrast, the 15-year mortgage stood at a rate of 4.85% a year ago.
Separate data from Mortgage News Daily supports Freddie Mac’s report. The 30-year fixed-rate mortgage is currently averaging at 7.36% as of Thursday afternoon.
Lisa Sturtevant, the chief economist at Bright MLS, expressed concern about the rising rates and uncertainty in the economy. She noted that earlier in the year, inflation seemed under control and the prospects for lower rates were possible. However, recent events have shown an increase in inflation and bond yields, leading to a different situation. Sturtevant now questions how much higher rates may go, suggesting rates above 7% may be on the horizon.
In conclusion, the current state of mortgage rates in the U.S. indicates a steady upward trajectory. As economic indicators remain positive, the rates are expected to continue their rise, affecting existing and new home sales as well as the overall housing inventory situation.