Mortgage rates appear stuck in a range between 6% and 7%. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.72% this week, after falling to as low as 6.09% in October.
“This week, mortgage rates crept up to a similar average as this time in 2023,” said Sam Khater, Freddie Mac’s chief economist.
“For the most part, mortgage rates have moved between 6 and 7 percent over the last 12 months. Homebuyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home, resulting in additional purchase activity.”
Not historically high but high enough
Even though current mortgage rates are not historically high, they pose affordability challenges for would-be homebuyers. That’s because historically low mortgage rate three and four years ago inflated the value of home. And that inflation continues.
As it reports sales of existing homes rose almost 5% in November, the National Association of Realtors noted that home prices continue to rise. The median price for existing homes increased by 4.7% from the previous year to $406,100.
This marks the 17th consecutive month of year-over-year price increases, reflecting sustained demand in the housing market in spite of higher mortgage rates.