Mortgage rates are nearing 8%, keeping buyers sidelined and bringing purchase activity to a near stall, according to Freddie Mac. The average 30-year fixed-rate mortgage increased to 7.79% for the week ending Oct. 26, according to Freddie Mac's latest Primary Mortgage Market Survey. That's an increase from the previous week when it averaged 7.63%. A year ago, the 30-year fixed-rate mortgage averaged 7.08%. The average rate for a 15-year mortgage was 7.03%, up from 6.
Affordability challenges and too few homes for sale are keeping many prospective buyers on the sidelines. Still, new home sales jumped 12.3% month-over-month in September as buyers looked to lock in a mortgage before rates climbed any higher, according to Jones. Forty-six percent of consumers said they expect mortgage rates to climb higher in the next 12 months, according to a recent Fannie Mae survey.
The Federal Reserve has raised interest rates 11 times since March of last year, pushing the federal funds rate to a 22-year high of 5.25% to 5.5% in a bid to slow the economy and lower soaring inflation. Despite the restrictive stance, the latest economic growth readings show that Gross Domestic Product in the third quarter of 2023 increased at more than twice the rate of growth in the previous quarter.
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