Mortgage rates reach their highest level in four months, as housing starts begin to weaken

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Home loan rates jumped bond market yields as new signs of familiar headwinds threatened the real estate market.

According to Freddie Mac's weekly survey, the 30-year fixed rate mortgage averaged 4.65% during the week of September 20th. This rose five basis points during the week and marked the fourth consecutive weekly gain. The 15-year fixed rate mortgage averaged 4.11%, up five basis points. The 5-year-indexed hybrid variable rate mortgage averaged 3.92% compared to 3.93%.

Mortgage rates are parallel to the yield on 10-year US Treasury bonds.

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, which reached its highest level in four months as fears of a trade war eased and Federal Reserve officials doubled their intentions to raise interest rates.

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The popular 30-year fixed rate mortgage is also at its highest level in four months and, although some base points would not dampen the demand for real estate financing in a healthy market, current market conditions appear vulnerable.

Builders began building more homes in the most recent month, but asked for much less permits – a sign that construction activity could soon begin to decline. Sales of previously owned homes are down 1.2% since the beginning of the year compared to the same period last year, just months after finally recovering from a post-crisis peak.

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If rates are really rising after several years of false starts, they could be an additional hurdle. According to Zillow's mortgage calculator, a monthly payment on mid-priced housing, assuming a down payment of 20%, would cost about $ 82 more per month than the annual average rate of 3.99% last year.

If they are available, there is a disproportionate demand for housing, but it's a big "if". And with more and more signals indicating that the current economic cycle is entering its final stages, housing is starting to look like an indicator, not an aberration. , say some analysts.

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