The 30-year fixed-rate mortgage continued its historic ascension, averaging 7.23% as of today, according to the latest Primary Mortgage Market Survey from Freddie Mac (OTCQB: FMCC). Last week, it broke past the 6% mark to average 7.09%m while a year ago at this time it averaged 5.55%.
“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” said Sam Khater, Freddie Mac’s chief economist.
The 15-year fixed-rate mortgage averaged 6.55% as of today, up from last week when it averaged 6.46% and from one year ago at this time when it averaged 4.85%.
“As rates remain high and supply of unsold homes woefully low, incoming data shows that existing homes sales continue to fall,” Khater added. “However, there are slightly more new homes available, and sales of these new homes continue to rise, helping provide modest relief to the unyielding housing inventory predicament.”
Indeed, sales of new single‐family houses in July hit a 17-month high, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Last month’s data recorded a seasonally adjusted annual rate of 714,000 new single-family home sales, up 4.4% from the revised June rate of 684,000 and is 31.5% above the July 2022 estimate of 543,000. The median sales price of new houses sold in July 2023 was $436,700 and the average sales price was $513,000.
The seasonally adjusted estimate of new houses for sale at the end of July was 437,000, which represents a supply of 7.3 months at the current sales rate. However, elevated mortgage rates may work against July’s progress.
“Despite this monthly uptick, new home sales will likely weaken in August as higher interest rates price out prospective buyers,” said National Association of Home Builders Chief Economist Robert Dietz. “Mortgage rates increased from 6.7% at the start of July to above 7% in August.”