Mortgage rates stopped their unrelenting upward climb last week, but continued to hover near the highest level in more than two decades.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan held steady to 7.79%, unchanged from the previous week. The rate remains well above the 7.08% recorded just one year ago and the pandemic-era lows of 3%.
The average rate on a 15-year mortgage – which is more popular among homeowners who choose to refinance – also was unchaged at 7.03%.
A sign outside a home for sale in Atlanta, Georgia on Sept. 6, 2023. Home prices in the U.S. climbed for a fifth month as buyers competed for deals in the least affordable market in decades. (Photographer: Elijah Nouvelage/Bloomberg via Getty Images / Getty Images)
The astronomical rise in mortgage rates over the past year came as the Federal Reserve waged an aggressive campaign to crush high inflation. In the span of just 16 months, the central bank approved 11 rate increases – the fastest pace of tightening since the 1980s.
High mortgage rates have throttled consumer demand, with the Mortgage Bankers Association's (MBA) index of mortgage applications plummeting last week to the lowest level since 1995.
They are also weighing heavily on supply. That is because sellers who locked in a low mortgage rate before the pandemic have been reluctant to sell with rates continuing to hover near a two-decade high, leaving few options for eager would-be buyers.
Homes in Hercules, California, US, on Wednesday, Aug. 16, 2023. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
A recent report from Realtor.com shows that the total number of homes for sale, including those that were under contract but not yet sold, fell by 4% in September, compared with the same time a year ago.
Available home supply remains down a stunning 45.1% from the typical amount before the COVID-19 pandemic began in early 2020, according to the report.
This is a developing story. Please check back for updates.