- The average
30-year fixed mortgage rate rose to 3.09% this week, its highest level since June. - Rates have been rising since January as
markets gird for economic reopening and stronger inflation. - Still, demand for homes is handily outstripping supply as new construction fails to accelerate.
The average 30-year fixed mortgage rate rose to 3.09% this week, according to data from Freddie Mac. That's the highest level since late June and compares to a reading of 3.05% one week prior. Still, the 30-year rate average sits well below its year-ago level of 3.65%.
The average 15-year fixed mortgage rate rose to 2.4% from 2.38% last week to hit, hitting its highest point since September.
Mortgage rates have steadily risen since January as investors position for stronger inflation as the
The trend hasn't yet pushed potential buyers out of the market, Sam Khater, chief economist at
"Residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers," Khater added.
More barriers than just higher mortgage rates
The
But while interest rates remain near zero, mortgage rates have been more closely tracking Treasury yields. The near-zero rates that sparked the housing boom are no longer its primary driver.
New hurdles have emerged from the strained relationship between buyers and builders. Home prices shot higher as demand handily outstripped supply. And though rates have risen through the spring, contractors are still unable to keep up with the market.
That supply-demand imbalance is now forcing potential homebuyers to pay above listing prices just to secure a purchase. The sale-to-list price ratio tracked by Redfin rose to 100.1% for the week that ended March 7, its highest level since data collection began in 2016. The firm also found median sales prices for newly listed homes reached a record high and that new listings were down 17% year-over-year.
Even pricier materials are contributing to soaring home costs. The National Association of Homebuilders said last month that factory shutdowns last March slammed lumber supply chains and led to a spike in the commodity's price. Elevated lumber costs now add roughly $24,000 to the price of a new home, NAHB Chairman Chuck Fowke told HousingWire.