By Patrick Clark | Bloomberg
US mortgage rates rose back above 5%, ratcheting up pressure on the cooling housing market.
The average for a 30-year loan increased to 5.22% from 4.99% last week, Freddie Mac said Thursday in a statement. That’s the first increase since July 21.
This year’s rise in borrowing costs has started to calm the pandemic-era frenzy that gripped housing markets across the country. Potential buyers have been sidelined as they struggle to find affordable properties. These days homes are lingering on the market longer, fueling an increase in housing inventory in July, according to a Realtor.com report.
“The 30-year fixed-rate went back up to well over five percent this week, a reminder that recent volatility remains persistent,” said Sam Khater, Freddie Mac’s chief economist. “Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market.”
With the market cooling, homebuilders are now facing a rise in unsold properties. Confidence among those companies plunged in July as sales and buyer traffic slowed, according to a survey from the National Association of Home Builders and Wells Fargo & Co.
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Freddie Mac’s mortgage data is collected from Monday through Wednesday. On Mortgage News Daily, which updates the figure more frequently, the rate on a 30-year loan hit 5.18% late Wednesday.
“Real estate markets continue on the path toward rebalancing,” said George Ratiu, Realtor.com’s manager of economic research. “These shifts point toward a welcome change for buyers who are still in the market.”