Mortgage rates hit 7-year high, crimping home sales

Lloyd Doyle
November 11, 2018

Ten years ago, a housing collapse contributed to a deep recession. The 15-year fixed-rate mortgage averaged 4.33%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14%, both up 10 basis points during the week.

In New York City, where luxury condo apartments are in a protracted sales slump, the rising interest rates and declining mortgage applications threaten to spread the pain to all levels of co-op and condo apartment sales. The average interest rate for a 15-year fixed-rate mortgage remained unchanged at 4.55%. The Fed announced today that it's holding its benchmark federal funds rate in a range of 2 percent to 2.25 percent.

A gauge of U.S. mortgage applications fell last week to the lowest level in nearly four years as borrowing costs hit the highest since 2010, adding to challenges for the housing market. The rate-setting Federal Open Market Committee said it expects to continue gradually raising rates as the economy expands. Strong business activity and employment growth drove a surge.

"While the October drop was broad-based-all but one of the six HPSI components declined-the net share of consumers who said it's a good time to buy a home posted the largest decrease, tying its second lowest reading in the survey's history", said Duncan.

Added Khater, "Higher mortgage rates have led to a slowdown in national home price growth, but the price deceleration has been primarily concentrated in affluent coastal markets such as California and the state of Washington".

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. For example, mortgage applications fell to a four-year low last week.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

Other reports by Iphone Fresh

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