Mortgage Rates in the U.S. Rise for First Time in Seven Weeks
Even as new listings decline, inventory is on the rise because homes are taking longer to sell.
Mortgage rates in the US rose for the first time since mid-November.
The average for a 30-year, fixed loan was 6.42%, the highest since early this month and up from 6.27% last week, Freddie Mac said in a statement Thursday.
Borrowing costs tracked 10-year Treasury yields, which climbed after a report showed that a consumer-price gauge the Federal Reserve watches closely continued to cool. Inflation is still higher than the central bank would like, and wage growth is stubbornly robust, meaning the Fed’s policy of interest-rate hikes is likely to continue into the new year.
For would-be homebuyers, mortgage costs are more than double what they were a year ago and “remain a significant barrier to successfully closing transactions,” said George Ratiu, head of economic research at Realtor.com. Purchases have been declining for months, and in November, contract signings slid to their second-lowest pace in records going back to 2001. With demand slumping, sellers are reluctant to list properties.
Even as new listings decline, inventory is on the rise because homes are taking longer to sell. In the four weeks through Dec. 25, the number of properties on the market increased 18% from the same period a year earlier, Redfin Corp. said in a report Thursday. It was the biggest gain since at least 2015, according to the brokerage.
The typical home was on the market for 40 days before going under contract, more than double the record low of 18 days set in May and the slowest pace since January 2021, Redfin said.
While home prices have slipped from the peak reached in June, they’re still rising from year-earlier levels — a double whammy for shoppers still in the hunt for something affordable. At current mortgage rates, the buyer of a median-priced home would pay about $2,100 a month without taxes or insurance, roughly 60% more than last year, according to Ratiu.
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