Mortgage rates were slightly higher this week, according to the Primary Mortgage Market Survey from Freddie Mac. the 30-year fixed mortgage rate averaged 4.52 percent with an average 0.5 point for the week, up from 4.51 percent last week. However, the 15-year fixed rate mortgage averaged 3.97 percent with an average 0.5 point, down from 3.98 the previous week.
According to Sam Khater, Freddie Mac’s Chief Economist, mortgage rates are showing a steadiness not seen since fall 2016.
“The 30-year fixed-rate mortgage barely inched up this week, continuing the summer trend of essentially being flat,” said Khater. “While sales and price growth have softened these last few months, this leveling of rates may be helping more buyers reach the market. Purchase mortgage applications this week were once again modestly above year ago levels.”
Freddie Mac is only expecting a 0.2 percent increase in total home sales, 6.12 million in 2017 to 6.14 million at the end of 2018, despite the record breaking economic expansion.
“Given the strength of the economy, it is possible for home sales to pick up even more before year’s end,” Khater added. “The key factor will be if affordably-priced inventory increases enough to continue this recent trend of cooling price appreciation.”
Realtor.com Chief Economist Danielle Hale notes that mortgage rates are still significantly higher than last year, as the inventory remains a problem.
“In spite of the steadiness since spring, mortgage rates are 70 basis points higher than one year ago,” said Hale. “Coupled with home price increases, higher mortgage rates mean an extra $2,000 per year in principal and interest payments on the typical home listing. Although higher prices are a hurdle for buyers, the biggest obstacle to growth in home sales remains the scarcity of homes available for sale, especially in lower price tiers. Signs of a turnaround in inventory are evident for higher-priced homes, but to really see home sales pick up, more affordable inventory is needed."