Source: U.S. News —
Mortgage rates surged above the 7% threshold for the 30-year fixed mortgage term this week, according to Freddie Mac. This is the first time that average rates have entered 7% territory since early 2002. Interest rates also rose for the 15-year fixed term and the 5/1 adjustable-rate mortgage. Here are the current mortgage interest rates, as of Oct. 27:
- 30-year fixed: 7.08% with 0.8 point (up from 6.94% a week ago, up from 3.14% a year ago).
- 15-year fixed: 6.36% with 1.4 points (up from 6.23% a week ago, up from 2.37% a year ago).
- 5/1-year adjustable: 5.96% with 0.3 point (up from 5.71% a week ago, up from 2.56% a year ago).
“The 30-year fixed-rate mortgage broke 7% for the first time since April 2002, leading to greater stagnation in the housing market. As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”
– Sam Khater, Freddie Mac’s chief economist, in an Oct. 27 statement
As mentioned in last week’s column, 7% mortgage rates may become the “new normal” while the Federal Reserve struggles to tame historically high levels of inflation. Higher interest rates have had a tangible impact on homebuilder confidence as well as consumer sentiment, and it’s understandable that many of us are suffering from data overload.
Amid such turbulence in the housing market, even the most seasoned analysts are left grappling for an explanation. So in a recent Q&A, economists at the real estate brokerage company Redfin set out to clear up the confusion in the housing market. Below is some of the most pertinent advice they gave to prospective homebuyers and sellers.
Indicator of the Week: Words of Wisdom From Housing Economists
Why Home Prices Haven’t Fallen, and When They Might Drop
Although higher mortgage rates have long been expected to trigger home price deceleration, home prices have remained stubbornly high in recent months. There are two reasons for this, according to Taylor Marr, Redfin’s deputy chief economist.
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