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Rates on 30-year mortgages rose again this week, reaching their highest level since October 2008, experts say.

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The average rate on 30-year fixed-rate mortgages increased to 6.29% in the week ended Sept. 22, according to Freddie Mac. Overview of the Primary Mortgage Market. It’s up from last week when it averaged 6.02% and significantly higher than last year when it was 2.88%.

Other loan terms also increased this week. The 15-year mortgage rate rose to 5.44% from 5.21% last week and 2.15% last year. The Treasury’s five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) also rose to 4.97% from 4.93% last week and 2.43% last year.

Sam Hater, chief economist at Freddie Mac, said rising mortgage rates have driven house prices down, but supply is still a barrier to home buyers’ affordability.

“Higher rates are pushing home prices down and home sales are down,” Hater said. “But despite this decline in sales, the number of homes for sale remains well below normal levels.”

If you think you’re ready to look for a mortgage, consider using the Credible marketplace, which helps you easily compare interest rates from multiple mortgage lenders in minutes.

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Low housing supply remains an obstacle

The housing stock is likely to remain tight through the end of this year, Lawrence Yun, chief economist at the National Association of Realtors (NAR), said in a statement.

Yoon also said that the low supply of existing homes has increased the need for new homes.

Last National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI) said builder confidence has been deteriorating for the ninth straight month, falling to 46 in September from 49 in August. Anything below 50 is considered bad. The drop in confidence shows how high interest rates, disruptions in building materials supply chains, and high home prices have taken a toll on housing affordability.

“In 2022, builder sentiment has been declining month by month,” said Robert Dietz, chief economist at the NAHB. “And the housing recession shows no signs of easing as builders continue to grapple with higher building costs and the Federal Reserve’s aggressive monetary policy, which helped raise mortgage rates above 6% last week, the highest level since 2008″.

If you are considering buying a home and want to know more about which mortgage product is right for you, you can visit Credible to speak with a mortgage expert and get all your questions answered.

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Housing prices are falling, but affordability remains a challenge

Higher mortgage rates dampened the appetite of homebuyers, causing existing home sales to drop for seven straight months. realtor.com. House prices also fell 6% in August from their June peak.

But despite the recent decline, home prices are still up 14.1% year-over-year and up 43.8% since August 2019, meaning affordability remains an issue for homebuyers. Zillow.

George Wrightu, Senior Economist at Realtor.com, said a buyer who currently buys a mid-priced home with a 30-year fixed-rate mortgage is paying about $900 a month more on his loan than a year ago. This will add over $10,000 to the homebuyer’s financial burden.

“For buyers watching their wages dwindle due to higher prices and purchase budgets shrink due to rising rates, today’s housing market remains highly unaffordable,” Wrightu said. “In many places, lowering prices may be the only viable option to rebalance housing and affordability.”

If you want to take out a mortgage or get a mortgage refinance, using an online marketplace like Credible can help you compare lenders and find the best rate for you.

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