Mortgage rates rose for the fifth week in a row amid concerns over whether the U.S. Federal Reserve will hike interest rates, as well as over the ongoing conflict in Israel and Gaza.
The 30-year fixed-rate mortgage averaged 7.57% as of Oct. 12, according to data released by Freddie Mac
FMCC,
on Thursday.
It’s up 8 basis points from the previous week — one basis point is equal to one hundredth of a percentage point. Rates continue to be at their highest level since December 2000.
A year ago, the 30-year rate was averaging 6.92%.
The average rate on the 15-year mortgage was 6.89%, up from 6.78% last week. The 15-year was at 6.09% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging 7.6% as of Thursday afternoon.
What Freddie Mac said: “Mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints,” he said. “As a result, purchase demand remains at a three-decade low.”
What are economists saying? “We’re entering a new cycle where, when rates do begin to come down, they will settle at a new normal that is higher than we have had in years,” Lisa Sturtevant, chief economist at Bright MLS, told MarketWatch.
“Beginning with the financial collapse in 2008, the average rate on a 30-year fixed-rate mortgage has been below 5%. Before then, average rates were more typically in the 6% range, and it is likely that is where we will end up when the dust settles,” she said.
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