‘Many Prospective Buyers Are Waiting for the Volatility in Mortgage Rates To Subside’: Mortgage Rates Hit 7.08%, Freddie Mac Says

The numbers: The housing sector continues to face headwinds.

The 30-year fixed-rate mortgage averaged 7.08% as of Nov. 10, according to data released by Freddie Mac on Thursday.

The 30-year was last at this level in mid-2002.

That’s up 13 basis points from the previous week—one basis point is equal to one hundredth of a percentage point, or 1% of 1%.

Last week, the 30-year was at 6.95%. Last year, the 30-year was averaging at 2.98%

The average rate on the 15-year mortgage rose to 6.38%.

“The housing market is the most interest-rate sensitive segment of the economy, and the impact rates have on homebuyers continues to evolve,” Sam Khater, chief economist at Freddie Mac, said in a statement.

“Home sales have declined significantly and, as we approach year-end, they are not expected to improve,” he added.

The adjustable-rate mortgage averaged 6.06%, up from the prior week.

What are they saying? Some homebuyers are fed up waiting for rates to stabilize and are jumping in with 7% rates, an industry group said.

“Although mortgage rates remained above 7% last week, applications to buy a home increased for the first time in six weeks,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement.

Still, “many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook,” he added.

Mortgage demand overall continues to be weak, as refinances plunge, the MBA said on Wednesday.

The yield on the 10-year Treasury note dropped to 3.8% during the morning trading session on Thursday.

Source: realtor.com

Author: Aarthi Swaminathan