Mortgage rates notched their seventh straight week of gains this week as Treasury yields rose. The rapid rise has slowed home purchases “to a virtual standstill,” one economist says.
The average 30-year fixed mortgage rate this week was 7.79%, according to
Freddie Mac.
This week’s average rate represents a 0.16 percentage point increase from one week prior, the greatest weekly jump since early October.
This week’s rise is the longest streak of week-over-week gains since spring 2022, Sam Khater, Freddie Mac’s chief economist, said in a statement. “Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.”
Such news might feel like housing market whiplash on the heels of two stronger-than-expected measures of contract signings in September. New home sales increased 12.3% from the month prior, while pending home sales rose unexpectedly.
It will take time to see how the highest rates in 23 years have translated to home sales in October—but some buyers are still in the market, even as mortgage application volume has sagged. Adjustable-rate mortgage applications comprised the largest share of total applications last week since November 2022, according to the Mortgage Bankers Association.
Mortgage rates also have little bearing on the decisions of cash buyers, who in September comprised a larger share of total existing-home purchases than first-time buyers, according to the National Association of Realtors.
After a long streak of mortgage rate gains, there might be some near-term good news for prospective buyers waiting for lower rates. The 10-year Treasury yield, with which mortgage rates often move, was falling this morning.
Write to Shaina Mishkin at [email protected]
Read the full article here