US mortgage rates rise for sixth straight week, dampening home purchases

by@business

Summary

US mortgage rates have continued to rise, leading to a decline in home purchasing activity for the sixth consecutive week, marking the longest downtrend since mid-2023 according to the Mortgage Bankers Association purchase index. This surge in mortgage rates, which has been significant since late June, has compounded affordability pressures for potential homebuyers amidst already elevated home prices. Additionally, while there was a recent uptick in existing-home sales, it largely stemmed from earlier contract activity and may not fully reflect the impact of the current mortgage-rate increase.

Analysis

US mortgage rates: US mortgage rates are borrowing costs for residential home loans, influenced by bond-market conditions, inflation expectations, and broader monetary policy. In the reported development, the 30-year fixed rate reached its highest level since late 2023, contributing to a sustained decline in purchase-loan applications and weakening housing demand. Affordability: Mortgage rates have risen substantially since late June, adding to affordability pressures alongside elevated home prices. Housing demand: The Mortgage Bankers Association purchase index declined for a sixth consecutive week, extending its longest losing streak since mid-2023. Existing-home sales: A recent increase in existing-home sales largely reflected earlier contract activity and may not capture the full effect of the latest mortgage-rate surge.

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