The 30-year fixed-rate mortgage averaged 4.94% in the Nov.8 week, a gain of 11 basis points, mortgage finance provider Freddie Mac said Thursday. That was the highest for the popular loan product since February, 2011. The 15-year fixed-rate mortgage averaged 4.33%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14%, both up 10 basis points during the week.
Those rates don’t include fees associated with obtaining mortgage loans.
Fixed-rate mortgages move in line with the U.S. 10-year Treasury note, although with a slight delay.
In the housing market, meanwhile, the slow and steady upward march of mortgage rates is taking a toll. With options scarce and affordability stretched, higher borrowing costs are thwarting buyers like Andy and Emerline Hunte.
The Huntes and their two boys have been searching for a house for two years, while sticking it out in a cramped basement apartment in the East New York section of Brooklyn. Saving for a down payment has been “arduous,” Andy told MarketWatch. “We may end up dipping into our 401(k) to put 20% down in order to not carry mortgage insurance.”
But rising rates – and prices – have put that dream aside for now, and the Huntes are now targeting a single-family home with enough bedrooms and “a large enough backyard for our little one to play.” The “little one” also needs a good school district, but his parents haven’t been able to find a home that they can afford that checks all those boxes.
The family has been house-hunting for so long that their first pre-approval had what bond traders sometimes call a “3-handle.” That rate, 3.875%, was renewed a year later at 4.875%, and now Andy sees a 5% mortgage looming ahead.
“The increase has made it more difficult to afford the mortgage we could have afforded two years ago,” Hunte said. “Makes me really wish I had purchased when I first started looking.”
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