XHB - Long-term mortgages exceed 7% as economy continues to do better-than-expected

2023-08-17 12:23:18 ET

Long-term mortgages exceeded 7% this week as the economy continues to do better-than-expected, according to the Freddie Mac Primary Mortgage Survey.

30-year fixed-rate mortgages averaged 7.09% as of Aug. 17, up from last week when they averaged 6.96% and 5.13% in the year-ago period.

15-year fixed-rate mortgages averaged 6.46%, up from last week when they averaged 6.34% and 4.55% a year ago.

"The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb," Freddie Mac's chief economist, Sam Khater, said.

"The last time the 30-year fixed-rate mortgage exceeded seven percent was last November. Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales," Khater added.

According to Bankrate's weekly national survey of large lenders, 30-year mortgages averaged 7.31% this week, their highest level since 2001.

"The new reality has jolted the housing market: Home sales have fallen sharply since 2021, and homeowners, reluctant to give up their super-low mortgage rates, are staying put. Housing affordability has emerged as a persistent challenge," Bankrate analyst Jeff Ostrowski said.

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