The average rate for a 30-year fixed-rate mortgage this week surged to 7.23%, up from 7.09% last week and up from 5.55% a year ago, according to Freddie Mac’s Primary Mortgage Market Survey.
That’s the highest average rate for a 30-year in 21 years, according to the weekly report.
For the week ended August 24, the average rate for a 15-year fixed-rate mortgage was 6.55%, up from 6.46% last week and up from 4.85% a year ago.
“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” says Sam Khater, chief economist for Freddie Mac, in a statement. “As rates remain high and supply of unsold homes woefully low, incoming data shows that existing homes sales continue to fall.”
“However, there are slightly more new homes available, and sales of these new homes continue to rise, helping provide modest relief to the unyielding housing inventory predicament,” Khater adds.
The recent increase in rates to above 7% combined with the lack of inventory and high home prices has been decimating the real estate and mortgage industries. Yesterday, the Mortgage Bankers Association reported that mortgage application volume had dropped to the lowest level since 1995.
Photo: Susan Q Yin