Mortgage rates in the US increase for the first time since July

[WASHINGTON] Mortgage rates in the US rose, shifting direction after a steady string of declines. 

The average for 30-year, fixed loans was 6.3 per cent, up from 6.26 per cent last week, Freddie Mac said in a statement.

Even with this week’s uptick – the first since July – borrowing costs are still near their lowest levels in almost a year, creating opportunities for both house hunters and owners seeking to refinance. But affordability remains a hurdle for many would-be buyers, who also may be holding back out of concern for the future of the economy.

Closed purchases of resale homes in the US have been stuck around the same level since March, according to the National Association of Realtors. Contract signings – a more timely measure of demand – slipped from a year earlier in the four weeks through Sept 21, the first decline in almost three months, Redfin reported. 

Many buyers and sellers are waiting for mortgage rates to fall further. Some economists see 6 per cent as a threshold that would make it more palatable for owners to give up their cheaper loans and move somewhere else, unlocking fresh resale inventory.

Places with the biggest shares of mortgaged households stand to benefit the most from a drop below 6 per cent, according to a study by Realtor.com. Topping the list are Washington; Denver; Virginia Beach, Virginia; and Raleigh, North Carolina – areas where more than 70 per cent of property owners have loans. BLOOMBERG