The numbers: Home buyers are accepting the new reality of higher mortgage rates, but volatile rates and inventory challenges continue to hamper the U.S. housing market.
The 30-year fixed-rate mortgage averaged 6.39% as of May 18, according to data released by Freddie Mac on Thursday.
That was up 4 basis points from the previous week — one basis point is equal to one hundredth of a percentage point.
Last week, the 30-year was at 6.35%. Last year, the 30-year was averaging at 5.25%
The average rate on the 15-year mortgage remained unchanged at 5.75%. The 15-year was at 4.43% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 6.7% as of Thursday afternoon.
What Freddie Mac said: “After the substantial slowdown in growth last fall, home prices stabilized during the winter and began to modestly rise over the last few months,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“This indicates that while affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership,” he added.
What are they saying? Home sales fell in April, as low inventory and high rates weighed on the housing market.
“The high cost of a new mortgage is acting to discourage homeowners with a low fixed-rate mortgage from moving, which is disrupting sales chains,” Sam Hall, property economist at Capital Economics, wrote in a note.
“We expect subdued sales activity to persist this year as a weakening economy weighs on homebuyer sentiment,” he added. Gallup said recently that home-buying sentiment has fallen to a 45-year low.
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