The 30-year fixed-rate mortgage (FRM) increased from last week’s average of 7.63% to an average of 7.79% this week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 7.79% as of October 26, 2023, up from last week when it averaged 7.63%. A year ago at this time, the 30-year FRM averaged 7.08%.
- 15-year fixed-rate mortgage averaged 7.03%, up from last week when it averaged 6.92%. A year ago at this time, the 15-year FRM averaged 6.36%.
The takeaways:
“For the seventh week in a row, mortgage rates continued to climb toward eight percent, resulting in the longest consecutive rise since the Spring of 2022,” said Sam Khater, Freddie Mac’s chief economist. “Rates have risen two full percentage points in 2023 alone and, as we head into Halloween, the impacts may scare potential homebuyers. 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.”
Realtor.com Senior Economic Research Analyst Hannah Jones commented:
“The Freddie Mac fixed rate for a 30-year loan increased 16 basis points to 7.79% this week after the 10-year Treasury yield started the week by climbing above 5%. This is the seventh consecutive week of increase. Though Freddie Mac’s weekly mortgage rate reading has not exceeded 8%, borrowers quoted on the high end of today’s range are likely seeing rates beyond this threshold. The milestone of 8%+ mortgage rates, like 5% treasury yields, emphasizes the financial headwinds facing borrowers in today’s market. For mortgage rates to improve considerably, investors will need to see that economic growth is slowing, which would suggest that inflation is making progress towards 2% and that the Fed can pause, and eventually pivot, their contractionary policy.
“Though high mortgage rates and still-high prices weigh on home shoppers, recent new home sales data shows that buyers are finding a way to navigate the challenging environment. New home sales jumped 12.3% month-over-month in September as buyers locked in a mortgage before rates could climb any higher. Affordable new home sales also ticked up in the month, suggesting that builders are responding to demand for lower-priced homes. The existing home market still suffers from low inventory as many current homeowners choose not to list their home for sale, opting out of forfeiting their lower-rate mortgage for a loan at today’s rate. Existing home sales fell to a decade-plus low in September, and competition over scarce inventory pushed prices higher year-over-year.
“The national picture of the housing market may look quite different from your local area as today’s market continues to vary significantly by geography. Affordable housing markets, such as many featured on this quarter’s WSJ/Realtor.com Emerging Housing Markets list, continue to see significant price growth, despite relatively tame national price growth. Even with climbing prices, many of today’s sought-after markets remain lower priced than the national median, garnering significant attention from shoppers in high-priced metros. Low-priced housing markets in areas with strong economies are likely to continue to capture the nation’s attention until housing affordability improves on a larger scale.”
