Mortgage rates remained elevated for the eighth straight week, further straining affordability for many Americans already struggling with everyday expenses.
The average rate for the 30-year, fixed-rate mortgage, the most popular home loan in the United States, held steady at 7.4 percent, the highest in three years, the mortgage finance giant Freddie Mac said on Thursday. Mortgage rates were 6.27 percent at this time last year.
The war in Iran has crimped the world’s oil supply, sending energy prices higher and bringing pain to consumers and businesses. Higher costs for gasoline, diesel fuel and heating oil have begun to spread to the wider economy. Overall inflation jumped to 3.7 percent in September from the year before, higher than economists had expected.
Investors’ inflation fears have pushed up the yield on the 10-year Treasury note, which influences consumer and business borrowing costs, including mortgage rates.
The rise in mortgage rates has sent home sales tumbling. Existing-home sales fell 2.2 percent in September from the year before, the National Association of Realtors reported Tuesday. “Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home,” Lawrence Yun, NAR’s chief economist, said in a statement.
The affordability crunch is hurting first-time buyers in particular, said Nancy Vanden Houten, senior economist at Oxford Economics, because “more income is being eaten up by essentials.”
Activity in the housing market is not likely to pick up until after inflation eases, she said, adding, “We see things will begin to bounce back maybe next year or 2028.”
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