Mortgage rates in US increase for first time in seven weeks
MORTGAGE rates in the US rose for the first time in seven weeks to the highest level since the middle of September.
The average for a 30-year, fixed loan was 6.12 per cent, up from 6.08 per cent last week, Freddie Mac said on Thursday (Oct 3).
Despite the slight increase, borrowing costs are down significantly from this year’s high of 7.22 per cent, which was reached in May. The lower rates have started to thaw the frozen housing market, with more homeowners putting properties up for sale. New listings in September rose nearly 12 per cent from a year earlier, according to Realtor.com.
“The backdrop for homebuyers this fall is improving and should continue through the rest of the year,” Sam Khater, Freddie Mac’s chief economist, said.
Last month, the Federal Reserve reduced its benchmark interest rate for the first time in more than four years and is widely expected to further cut rates this year. Borrowing costs had fallen in anticipation of the Fed move in September.
While lower rates have helped boost demand from buyers in some places, it’s rising from a very low level as many wait for affordability to improve more. Homes are lingering on the market about a week longer than a year earlier, with properties being listed for a median of 39 days, according to Redfin data for the four weeks to Sep 29.
“The good news for homebuyers is that homes are moving slow, inventory is rising, and price cuts are elevated, giving them a leg-up in the market they have not had in years,” said Ralph McLaughlin, Realtor.com senior economist. BLOOMBERG
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