Mortgage rates in the US climbed for the third week in a row, reaching the highest level since 2008 and squeezing affordability as the US housing slowdown deepens.
The average for a 30-year loan increased to 5.89%, up from 5.66% last week, Freddie Mac said in a statement Thursday.
Borrowing costs have been on a rollercoaster ride recently, with rates up almost a percentage point over the past month. Higher rates have sidelined potential buyers, affecting markets including New York. Weakening demand has now started to weigh on prices, with the average US home selling below its asking price for the first time in nearly 18 months, according to Redfin Corp.
“Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy to combat elevated inflation,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “Not only are mortgage rates rising, but the dispersion of rates also has increased, meaning that borrowers can benefit from shopping around for a better rate.”
Khater said that Freddie Mac’s research shows homebuyers could save an average of $1 500 over the life of a loan by getting one extra rate quote, and an average of roughly $3 000 with five quotes. Freddie Mac’s weekly survey focuses on rates for borrowers who put 20% down and have excellent credit.
Freddie Mac’s loan data is collected from Monday through Wednesday. On Mortgage News Daily, which publishes a new figure daily, 30-year rates averaged 6.12%, up from 5.99% last week.
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