Mortgage rates rose for a seventh consecutive week, according to Freddie Mac’s survey released Oct. 8. The average rate on a 30-year fixed mortgage was 7.4%, up from 7.28% the week before and above the 6.3% average recorded a year earlier.
The average 15-year fixed mortgage rate increased to 6.73%, compared with 6.6% in the prior week’s survey.
Realtor.com senior economist Joel Berner attributed the increase in part to higher yields on 10-year U.S. Treasury bonds. He also pointed to inflation expectations, a bond-market selloff and federal borrowing needs as factors pushing yields upward. Mortgage rates are not directly set by Federal Reserve decisions, but they tend to track the 10-year Treasury yield.
Berner said higher financing costs were adding pressure to an already constrained housing market. He cited year-over-year declines in pending home sales in August and September, before mortgage rates moved above 7%, and said sellers had been cutting prices at the fastest pace in four years.
The source also reported that home prices were down 1.4% year over year and for-sale inventory was up 5.4% year over year. Those conditions may benefit buyers able to purchase without financing, Berner said, while higher borrowing costs continue to challenge buyers who need a mortgage.
