According to the survey, the 30-year fixed-rate mortgage was slightly down from 4.6 percent last week, However, it was up from 3.9 percent during the same week a year ago. The 15-year fixed-rate mortgage was at 4.05 percent during the week, down from 4.08 percent last week, but increasing from the same period last year when it averaged 3.18 percent.
The stability displayed by mortgage rates is much needed in the housing market today, according to Sam Khater, Chief Economist, Freddie Mac. "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.
Danielle Hale, Chief Economist at Realtor.com agreed. "Steady interest rates should give buyers some relief this week after enduring the most competitive home buying season of all-time," she said.
However, the question weighing on everyone's mind is how long will this stability last? According to Hale, although inventory has started picking up in high-end markets, "whether these increases provide relief for the average buyer remains to be seen.
"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," Khater said. "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 percent a year ago, some prospective buyers are definitely feeling an affordability crunch."
"Buying a home is now approximately 17 percent more expensive than it was a year ago, thanks to rising interest rates and home prices, Hale said. "In July, a median-priced home now costs a buyer $180 more a month in principal and interest than it did last July. Approximately, 9 percent of this increase is attributed to price gains and 8 is attributed to rate increases."