Rates for home loans pressed higher for the third week in a row amid evidence that seesawing financial markets are stifling the housing market.
In the week ending May 29, 30-year fixed-rate mortgages averaged 6.89%, Freddie Mac announced, up from 6.86% last week.
Those figures don’t include fees or points, and rates in some parts of the country may be higher or lower than the national average.
“Mortgage rates increased for the third straight week, pushed higher by continuing volatility in the financial markets,” said Mortgage Bankers Association President and CEO Bob Broeksmit, in a release. “These higher mortgage rates dampened borrower demand, with both refinance and purchase applications posting declines last week.”
So far this year, the most popular mortgage product has moved in the high-6% range, and the housing market has moved sideways. Sales of previously-owned homes fell in January, rose in February, and sank in March.
But early signals that the spring selling season would be a dud have turned out to be correct.
April sales were at the slowest pace for any April since 2009, the National Association of Realtors said on May 22. The 4 million pace set for sales last month was below the 4.06 million mark achieved in 2024, which was the worst year since 1995.
And things are getting worse: home contract signings fell 6.3% in April, the Realtors said on May 29. That means sales in May and June will likely be much lower, as well, since contracts are signed about six weeks before sales close.
One silver lining is that the deep freeze caused by “mortgage rate lock” – in which homeowners with ultra-low rates hold off on listing their homes given concerns about having to take out a new, higher-rate loan – has thawed more quickly than many observers had expected.
More: Is it finally a buyer’s housing market? What to know about home prices, rate ‘lock-in’
But sellers may still have unrealistic expectations about what their homes will fetch on the market. The typical home for sale is listed for a record high $469,729, which is 9% more than the typical home is selling for, $431,057, according to a recent Redfin analysis.
“Homebuyers today have the upper hand because they’re outnumbered by sellers,” said Redfin Senior Economist Elijah de la Campa, in a release.
This article originally appeared on USA TODAY: Mortgage rates rise again. Home sales are down.
