The housing market is start to slow with the rising mortage rates. The first part of August saw rates fall below 5%. In fact, the week ending in August 4th saw a 30-year fixed-rate at an average of 4.99%. The last week in July the rate was 5.3% as Freddie Mac reported.
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” said Sam Khater, Freddie Mac’s chief economist.
“The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
“Without a clear direction, markets are confining mortgage rates to move within a tighter range, as the sharp upward push has moderated,” he said.
“The big question for consumers is whether companies will over-react to the recession concerns and start trimming payrolls,” Ratiu said. “A sharp pullback in hiring could have a direct impact on people’s ability to keep spending, especially with today’s high inflation.”
Remember that the Federal Reserve does not set the interest rates for mortgages directly. The mortgage rate follows the ten year US Treasury bonds. The Federal Reserve also reported that there is a $16.2 trillion in household debt.
“As the number of new listings softens, it raises the concern that the nascent improvement in inventory may prove elusive as we approach the latter stages of summer,” said George Ratiu, Realtor.com’s manager of economic research.
