Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Mortgage rates reach 23-year high, impacting US housing market

Published Sep 28, 2023 05:37PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
FMCC
+1.87%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

The U.S. housing market is navigating challenging waters as mortgage rates have risen to their highest level in nearly 23 years. On Thursday, Freddie Mac's latest Primary Mortgage Market Survey revealed that the average rate for a 30-year fixed mortgage climbed to 7.31%, up from 7.19% the previous week and significantly higher than the 6.7% average a year ago.

The rate for a 15-year mortgage also rose, averaging at 6.72%, up from last week's 6.54%, and noticeably higher than the 5.96% average from a year ago. This surge in mortgage rates represents the highest levels recorded since the year 2000.

Sam Khater, Freddie Mac’s chief economist, noted that unlike the turn of the millennium, current house prices are rising alongside mortgage rates due to low inventory. This situation is causing both buyers and sellers to wait for improved conditions.

Data from the National Association of Realtors further illustrated this trend, showing a 7.1% drop in pending home sales in the U.S. last month. The high housing costs are evidently causing more consumers to hesitate before finalizing a deal.

The median monthly mortgage payment recently reached an all-time high of $2,632, pricing out many potential buyers or causing sticker shock. Concurrently, potential sellers who secured their homes at much lower mortgage rates are choosing to stay put, further exacerbating the ongoing inventory shortage which has been driving up home prices since the onset of the pandemic.

Despite this, Freddie Mac, with a market cap of 1940M USD, is expected to grow its net income this year according to InvestingPro Tips. The company's strong return over the last three months, with a 41.77% increase, is a testament to its resilience amidst these challenging times. Additionally, the company's liquid assets exceed its short-term obligations, providing it with a decent financial buffer.

The Federal Reserve's aggressive tightening campaign has led to a rapid cooling in the interest rate-sensitive housing market. Policymakers have increased the benchmark federal funds rate 11 times in an effort to curb stubborn inflation and slow down the economy.

During their policy-setting meeting last week, officials indicated that another rate hike could be expected this year, suggesting that rates are likely to remain high for some time.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Mortgage rates reach 23-year high, impacting US housing market
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email