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Mortgage Rates Reach 20-Year High | Freddie Mac
By Leslie Cook MONEY RESEARCH COLLECTIVE
According to Freddie Mac’s benchmark survey, the average rate on a 30-year fixed-rate mortgage is now averaging 7.09%.
Mortgage rates have reached a new 2023 high, topping 7% for the first time since last November.
The rate for a 30-year fixed-rate loan averaged 7.09% for the week ending August 17, according to Freddie Mac. This is the fourth consecutive week of increases, and the highest the 30-year rate has risen in 20 years.
The average rate on a 15-year fixed-rate mortgage is also higher, increasing by 0.12 percentage points to 6.46%.
Mixed economic data keeps rates high
The current state of the U.S. economy is being driven by two seemingly contradictory forces: lackluster job growth and reduced unemployment.
Recent jobs reports highlight this dichotomy: The economy added 187,000 new jobs in July, according to Bureau of Labor Statistics data, well below the average established in the first half of the year (wage growth also slowed.) Unemployment, on the other hand, dipped to 3.5%.
Recent market data has determined whether mortgage rates kept rising or were finally beginning their much-anticipated slide. The July Consumer Price Index, released last Thursday, showed inflation increased to 3.2% year-over-year (by comparison, the June CPI reported inflation at 3% YOY). The Producer Price Index, out last Friday, also came in higher than expected. Both reports helped push interest rates higher. Analysts will continue to monitor economic data in an effort to gauge the Federal Reserve’s next move.
“If the data provides no clear sign of a cooling economy, it could support the [Federal Reserve’s] concern that the inflation battle is not over,” said Realtor.com economist Jiayi Xu, in a prepared statement.
Translation? More rate hikes could be on the horizon.
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Leslie Cook is the Lead Mortgage Reporter covering mortgages and the housing market for Money. She has been a guest on the This Morning with Gordon Deal radio show and served as moderator for ServiceLink's State of Homebuying webinar. Her career started as a business reporter over 30 years ago, covering the computer and human resources beats for Caribbean Business newspaper in San Juan, Puerto Rico. She graduated Cum Laude from Bryn Mawr College in Pennsylvania with a bacheloru2019s degree in history.