The 30-year fixed-rate mortgage averaged 5.55% as of Aug. 25, according to data released Thursday by Freddie Mac. That’s up 42 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%.
The average rate on the 15-year fixed-rate mortgage rose 30 basis points over the past week to 4.85%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.36%, down 3 basis points from the prior week.
“The combination of higher mortgage rates and the slowdown in economic growth is weighing on the housing market,” Sam Khater, chief economist at Freddie Mac, said in a statement.
Khater added that even though home sales continue to decline, prices are moderating and consumer confidence is low, all indicating signs of “waning demand,” there are still prospective buyers “on the sidelines waiting to jump back into the market.”
So far, buyers — spooked by higher rates and economic uncertainty — have been pulling back, based on to mortgage application data.
For the average household taking out a 30-year fixed-rate mortgage with a 20% down payment, the typical monthly payment has increased by 54% from last year, to $1,944, the National Association of Realtors said.
Cancellations are piling up, and sellers in hot pandemic markets like Boise, Idaho and Salt Lake City, Utah, are dropping prices to entice buyers. In Boise, for instance, Redfin recently noted that 70% of homes on sale had a price drop.
The NAR expects home-price appreciation to slow to 5% by the end of this year and into 2023.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at firstname.lastname@example.org.