Mortgage rates increased for the third straight week — but still remain very low compared to a year ago.
The 30-year fixed-rate mortgage averaged 3.75% during the week ending Oct. 24, up six basis points from the previous week, Freddie Mac FMCC, +4.56% reported Thursday.
The 15-year fixed-rate mortgage increased three basis points to an average of 3.18%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.4%, up five basis points from a week ago.
Mortgage rates roughly track the direction of the 10-year Treasury note TMUBMUSD10Y, -1.58%, the yield on which has roughly stayed the same over the past week.
“The outlook for a favorable resolution to the trade dispute between the U.S. and China is still unclear, introducing some volatility into financial markets and the benchmark 10-year Treasury yield,” Sam Khater, Freddie Mac’s chief economist, said in the report. “Mortgage rates are following suit at near historic lows, while mortgage applications to purchase a home remain higher year over year.”
Even though mortgage rates have risen from the 2019 low recorded at the beginning of September, they remain more than a full percentage point below where they were at this point last year. That’s helped those home buyers who may have struggled to meet the repayment requirements.
Affordability and the overall strength of the economy nevertheless remain significant headwinds for the housing market. But recent data suggests that some additional relief may be on the horizon, at least where high home prices are concerned.
The median sales price of newly-constructed homes dropped in September below $300,000, which economists said could be an indication that home builders are constructing homes at the cheaper end of the market.
That would be good news for first-time home buyers who have faced the most competition in the housing market, driving up home prices in the process.