Mortgage Rates Continue To Rise

The 30-year fixed rate mortgage rose to 5.89 percent this week, topping an earlier high in June, according to the weekly survey by Freddie Mac released today. A year ago the rate was below 3 percent. Rates are expected to continue to go up as markets continue to manage the prospective of a more aggressive monetary policy due to elevated inflation, according to Freddie Mac.

The rising rates are another blow to the cooling real estate market. Higher rates can add hundreds of dollars to a buyer’s monthly mortgage costs. Still there are wide variations in local housing markets with some parts of the country cooling off more than others.  For instance, in Lafayette the average sales price of a single-family home in August was 2.19 million, while the average sales prices was 99 percent of the list price, according to the Multiple Listing Service. This is down 10 percent from a year ago indicating a cooling market.  In addition inventory, while still low with one month’s supply nevertheless was up 38 percent compared to a year ago.