"This reality illustrates the challenging situation facing the housing market"
After two consecutive weeks of declines, US mortgage rates rose back above 3% this week, according to Freddie Mac.
Freddie Mac chief economist Sam Khater said that the combination of rising inflation and consumer spending had driven a 12-basis point increase in the 30-year fixed-rate mortgage. The benchmark long-term rate averaged 3.10% for the week ending November 18.
“Shoppers looking to buy a home are fueling strong demand while ongoing inventory shortages are not improving in the presence of higher home prices,” Khater said. “This reality illustrates the challenging situation facing the housing market.”
Read more: Higher rates continue to impact mortgage application activity
“Higher inflation summons higher mortgage rates just as surely as baked beans invite ants to a picnic,” added Holden Lewis, home and mortgage specialist at NerdWallet. “The inflationary trend is pushing the 30-year fixed-rate mortgage above 3% for good.”
The 15-year fixed-rate mortgage jumped from 2.27% to 2.39% week over week, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage dropped 2.53% to 2.49%.