Mortgage rates in the US increased this past week, further crimping affordability ahead of what’s usually the homebuying market’s busiest season.The average for a 30-year, fixed loan was 6.65%, up from 6.5% last week, Freddie Mac said in a statement Thursday.
Borrowing costs have been on a volatile ride since the start of 2023. Rates eased up in January, fueling a bigger-than-expected rise in the sale of new homes that month, but have since shot back up over the past four weeks.
That’s pressuring demand. Home-purchase loan applications are at the lowest level in nearly three decades.
“Now that rates are moving up, affordability is hindered and making it difficult for potential buyers to act, particularly for repeat buyers with existing mortgages at less than half of current rates,” said Sam Khater, Freddie Mac’s chief economist.
Buyers are facing drastically higher rates than a year ago. For a $600,000 mortgage, a consumer would be paying $3,852 a month, compared to $2,782 nearly a year ago.
“While mortgage rates declined in January, giving many buyers hope that affordability may improve, they are on the rise again, and could even crest 7% again in the next couple of months,” said George Ratiu, a senior economist at Realtor.com.
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