The 30-year fixed-rate mortgage averaged 5.66% as of Sept. 1, according to data released Thursday by Freddie Mac. That’s up 11 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%.
The 30-year is at the highest level since June, when rates hit 5.81% the week of June 23.
The average rate on the 15-year fixed-rate mortgage rose 13 basis points over the past week to 4.98%. The adjustable-rate mortgage averaged 4.51%, up 15 basis points from the prior week.
“The market’s renewed perception of a more aggressive monetary-policy stance has driven mortgage rates up to almost double what they were a year ago,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“Sellers are recalibrating their pricing due to lower purchase demand, likely resulting in continued price growth deceleration.’”
— Sam Khater, chief economist at Freddie Mac
And the increase in rates comes at a “particularly vulnerable time for the housing market,” he added, “as sellers are recalibrating their pricing due to lower purchase demand, likely resulting in continued price growth deceleration.”
So far, buyers — spooked by higher rates and economic uncertainty — continue to pull back, based on mortgage application data.
Meanwhile, sellers are having a much more difficult time. According to Realtor.com’s August report, listings are spending more days on the market, and are also taking price cuts. The number of homes available for sale is also increasing.
The National Association of Realtors expects home-price appreciation to slow to 5% by the end of this year and into 2023, down from 14.2% in the second quarter.
Elsewhere, Bank of America
is trying to make ownership more affordable for first-time home buyers in specific Black, African-American and Hispanic-Latino neighorboods by offering a new zero-down payment, zero-closing cost mortgages.
These include neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at email@example.com.