Average long-term US mortgage rate climbs to 6.96% this week, matching highest level this year
The average long-term U.S. mortgage rate rose this week to just under 7%, the latest setback for would-be homebuyers already facing affordability challenges due to a housing market limited by a shortage of homes for sale
LOS ANGELES — The average long-term U.S. mortgage rate rose this week to just under 7%, the latest setback for would-be homebuyers already facing affordability challenges due to a housing market limited by a shortage of homes for sale.
Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.96% from 6.90% last week. A year ago, the rate averaged 5.22%.
It’s the third consecutive weekly increase for the average rate, which now matches its high for the year set on July 13. High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans.
“There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again," said Sam Khater, Freddie Mac’s chief economist. «However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”
The average rate on a 30-year mortgage remains more than double what it was two years ago, when it was just 2.87%. Those ultra-low rates spurred a wave of home sales and refinancing. The sharply higher rates now are contributing to a dearth of available homes, as homeowners who locked in those lower borrowing costs two years ago are now reluctant to sell and jump into a higher rate on a new property.
The lack of housing supply is also a big reason home sales are down 23%
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