Low inventory, not higher rates, are restricting home sales, Freddie Mac said
Mortgage rates slipped during the week ending June 21, signaling that they are stabilizing, according to the Primary Mortgage Market Survey released by Freddie Mac.
Rates have now declined in three of the past four weeks.
The average rate for the 30-year fixed-rate mortgage was 4.57%, with an average 0.5 point, down from the previous 4.62% average. The average rate marked an increase from the same week in 2017, which posted a 3.9% average.
The 15-year fixed-rate mortgage averaged 4.04%, with an average 0.4 point, down from 4.07%. A year ago at this time, the mortgage averaged 3.17%. Rates for the 5-year Treasury-indexed hybrid adjustable-rate mortgage remained unchanged, averaging 3.83%, with an average 0.3 point. The mortgage averaged 3.14% in the year-ago period.
Freddie Mac Chief Economist Sam Khater described mortgage rates as “mostly tranquil.”
“After a sharp run-up in the early part of 2018, rates have stabilized over the last three months, with only a modest uptick since March,” he said. “However, existing-home sales have hit a wall, declining in six of the last nine months on a year-over-year basis.”
Khater said sales are being held back not by the increase in mortgage rates but by the persistently low supply levels. “Home shoppers can't buy inventory that doesn’t exist,” he said.