Mortgage rates in US rise to 6.94%, climbing for fourth week
UNITED States mortgage rates increased for the fourth week in a row as buyers navigate an increasingly tough housing market.
The average for a 30-year, fixed loan was 6.94 per cent, up from 6.9 per cent last week, Freddie Mac said on Thursday (Feb 29). That’s the highest level since the middle of December.
Borrowing costs have ticked upright as the housing market enters a key selling season. It is weighing on demand, with a measure of mortgage applications falling for five straight weeks and contracts to buy previously owned homes unexpectedly decreasing in January by the most in five months.
Federal Reserve officials have emphasised that the central bank will have to see evidence that inflation is cooling more before cutting rates. Its preferred gauge of underlying inflation rose in January at the fastest pace in nearly a year.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season,” Sam Khater, Freddie Mac’s chief economist, said.
Owners have been more reluctant to list homes for sale, leading to a shortage of options for buyers. That has pushed more shoppers to seek out newly built houses, purchases of which rose in January.
“While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines,” Khater said. BLOOMBERG
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