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The housing market won’t see a recovery as the end of the year approaches, says mortgage packager Freddie Mack.

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“Home sales have declined significantly and are not expected to improve as the end of the year approaches,” said Sam Kater, chief economist at Freddie Mac.

Hater’s comment came as the average long-term US mortgage rate topped 7% again and consumer prices remain close to multi-year highs.

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30-year fixed-rate mortgages averaged 7.08% with an average of 0.9 points as of November 10, up from last week when it averaged 6.95%. A year ago at this time, the 30-year FRM averaged 2.98%.

15-year fixed-rate mortgages averaged 6.38% with an average of 1.0 points, up from last week when it averaged 6.29%. A year ago at the same time, the 15-year FRM averaged 2.27%.

Treasury-indexed 5-year hybrid adjustable-rate mortgages (ARMs) averaged 6.06% with an average of 0.2 points compared to last week when it averaged 5.95%. A year ago at the same time, the 5-year ARM averaged 2.53%.

Two weeks ago, the average US long-term mortgage rate topped 7% for the first time in more than two decades, which, combined with sky-high home prices, has eroded homebuyers’ purchasing power, adding hundreds of dollars to monthly mortgage payments.

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Hater said: “The housing market is the most interest rate sensitive segment of the economy, and rates that affect homebuyers continue to evolve. Home sales have declined significantly and are not expected to improve as the end of the year approaches. .”

KB house sign

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Existing home sales have been down for eight straight months as the cost of credit has become too much of a drag for many Americans, who are already paying more for food, gas and other necessities. In addition, many homeowners looking to upgrade or relocate have put off listing their homes for sale because they don’t want to upgrade to a higher rate on their next mortgage.

The downturn in the housing market has prompted real estate companies to change their financial outlook and cut staff. Online real estate broker Redfin on Wednesday said it was cutting 862 employees and closing its instant cash subsidiary RedfinNow.

Redfin also laid off 470 employees in June, blaming the slowdown in home sales. Due to attrition and layoffs, Redfin has cut more than a quarter of its workforce on the assumption that the housing market downturn will last “until at least 2023,” regulators said in a statement.

Another online real estate broker, Compass, laid off hundreds of employees this year.

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While mortgage rates don’t necessarily reflect Fed rate hikes, they tend to track 10-year Treasury yields. Yields are influenced by many factors, including investor expectations of future inflation and global demand for US Treasury bonds.

Ticker Safety Last Change Change %
RDFP REDFIN CORP. 5.14 +0.83 +19.23%
COMP KOMPAS INC. 3.54 +1.10 +45.47%

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