Rates Rising Despite Cooling Market

Mortgage rates increased again this week, despite drops in both new and existing home sales in June and slowing home price appreciation. 

Freddie Mac Chief Economist Sam Khater explains that rising rates are going to tighten affordability again for buyers, even though home price gains are easing, and MarketWatch reports that industry experts believe, "the current real estate cycle may have run its course." Buyers are taking notice as well, as a recent survey by the National Association of Home Builders found that 69 percent of buyer-respondents expect the home search to stay the same, or become more difficult, and 63 percent believe inventory is either staying at the same level or diminishing, Realtor.com reports. 

The 30-year fixed-rate mortgage averaged 4.60 percent in the August 2 week, according to weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.08 percent, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.93 percent. All three products rose six basis points during the week. It was the second straight weekly gain for the popular 30-year-fixed. Mortgage rates follow the path of the 10-year U.S. Treasury note, which has surged as investors have shaken off trade war fears. The Treasury announced that it will increase the amount of debt it sells in its next refunding auction, and is on track to issue over $1 trillion in debt this fiscal year, the most since 2012.

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