With mortgage rates at their highest level since 2011, HousingWire staffer Ben Lane wonders if a housing slowdown is imminent.
According to the Mortgage Bankers Association, rates were at 4.77% over the last week and mortgage applications have been decreasing. And Sam Khater, Freddie Mac’s chief economist, points out that rising interest rates aren’t the only economic pressure consumers are facing.
“Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” Khater said (last) week. “Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”
Khater added, “While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5% could begin to hit the psyche of some prospective buyers,” Khater said.
As Khater stated, activity on the bond market impact mortgage rates. The yield on the 10-year Treasury is on the rise and continuing to rise on Thursday, and that will likely lead to even higher interest rates.
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