Mortgage rates rise as Fed fights inflation: Freddie Mac

Rates for the 30-year mortgage went back up last week after a slight dip the week before following the Federal Reserve's recent announcement that it would continue to tighten monetary policy, according to Freddie Mac. 

The average rate for a 30-year fixed-rate mortgage increased to 7.08% for the week ending Nov. 10, according to Freddie Mac's Primary Mortgage Market Survey. This was an increase from the previous week when it averaged 6.95% and was still significantly higher than last year when it was 2.98%.

Other loan terms also increased last week. The 15-year mortgage was 6.38%, up from 6.29% the previous week and 2.27% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 6.06% last week, up from 5.95% the week before and up from 2.53% last year.  

"The housing market is the most interest-rate sensitive segment of the economy, and the impact rates have on homebuyers continues to evolve," Sam Khater, Freddie Mac's chief economist, said. "Home sales have declined significantly and, as we approach year-end, they are not expected to improve."

If you're buying a home or looking to refinance your current mortgage, you can visit Credible and compare multiple mortgage lenders to find the right option for you.

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Fed may slow rate hikes over latest inflation figures

Inflation, although still high, slowed considerably in October, according to the latest Bureau of Labor Statistics (BLS) report. The Consumer Price Index (CPI), a measure of inflation, rose 7.7% annually in October, a slowdown from the 8.2% increase in September.  

The Fed will use two economic reports – CPI data from October and November – to determine how much it will raise interest rates at its next meeting in December, according to Danielle Hale, chief economist at Realtor.com.

"Today's reading was a step in the right direction, and if this momentum continues, it may mean that the Fed will hike by only an additional 50 basis points in December," Hale said in a statement.

If you think you're ready to shop around for a mortgage loan, you can use the Credible marketplace to help you easily compare interest rates from multiple mortgage lenders and get prequalified in minutes.

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Housing sentiment drops to all-time low, survey says

Consumer sentiment toward housing dropped 4.1 points to 56.7 and is 18.8 points lower than the same time last year, according to the Fannie Mae Home Purchase Sentiment Index (HPSI). The index is based on Fannie Mae's National Housing Survey.

Only 16% of respondents said that now is a good time to buy a home, which is a "new survey low," according to the HPSI. Meanwhile, 65% of respondents said they expected rates to continue increasing in the next 12 months and 37% of consumers said they expected home prices to drop in the next 12 months compared to 35% in September.

Fannie Mae's latest economic forecast said home prices could fall by an average of 1.5% next year, down from its previous forecast of 4.4% growth.

"As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months, consistent with our forecast," Doug Duncan, Fannie Mae's chief economist, said.

If you want to take advantage of your current home value before prices drop, you could consider taking out a cash-out refinance to help you pay down debt or fund home improvement projects. Visit Credible to find your personalized interest rate without affecting your credit score.

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