Home sales are benefitting from the summer's mostly stable rates
Mortgage rates eased up slightly during the week ending August 9, but also remained mostly unchanged, according to the Primary Mortgage Market Survey released by Freddie Mac.
Rates for the 30-year fixed-rate mortgage averaged 4.59%, with an average 0.5 point, declining from the 4.6% average in the previous period. However, the latest average marks an increase from the year-ago level of 3.9%.
The 15-year fixed-rate mortgage averaged 4.05%, with an average 0.5 point, down from 4.08%. A year ago at this time, the mortgage averaged 3.18%.
The average rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) declined to 3.9%, with an average 0.3 point, from 3.93% in the prior period. The 5-year ARM averaged 3.14% in the same period in 2017.
Freddie Mac Chief Economist Sam Khater noted that the summer has seen mortgage rate drift mostly sideways.
“This stability is much needed for home sales, which have crested because of the multi-year run up in prices, tight affordable inventory and this year’s higher rates,” Khater said. “Going forward, the strong economy will support the housing market, but with affordability pressures mounting, further spikes in mortgage rates will lead to continued softening in home price growth.”
“There continues to be a steady rate of job creation, but as we’ve seen throughout most of this economic expansion, wage growth is not meaningfully increasing above inflation. With home prices still climbing and mortgage rates up from 3.9% a year ago, some prospective buyers are definitely feeling an affordability crunch,” he added.
