Mortgage Rates Continue to Climb

Would be buyers took another hit this week as mortgage rates continue to climb. Under normal circumstances, housing prices would fall, but low inventory continues to raise prices, as demand is exceeding supply.

Why the Rise in Prices?

Current home owners are locked in at lower rates, making selling and moving a tough decision, as the monthly payments for a mortgage have skyrocketed. This has led to lower and lower amounts of inventory.’s September housing report released this week shows home prices rose for the second month in a row on an annual basis, while the number of homes on the market fell for the third consecutive month. However, there was a month-over-month increase in listing price reductions.

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Why do Mortgage Rates Continue to Climb?

While the fed’s rising interest rates are a key driver, they are not the sole reason for the rise in interest rates for home purchases.

“Mortgage rates maintained their upward trajectory as the 10-year Treasury yield, a key benchmark, climbed,” Freddie Mac chief economist Sam Khater said in a statement . “Several factors, including shifts in inflation, the job market and uncertainty around the Federal Reserve’s next move, are contributing to the highest mortgage rates in a generation. Unsurprisingly, this is pulling back homebuyer demand.”

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Home purchase applications have fallen to a three decade low. Applications are down over 20% over last year.

Mortgage Rates Continue to Climb


Mortgage rates continue to climb as the battle against inflation continues. Ever rising prices in sectors like groceries have affected all American households, putting another additional strain on people’s ability to afford a new home.

As we spoke about last week, income to housing prices ratios continue to be at extraordinary levels. It is expected to continue to get worse, which will continue to dampen the market. Rising mortgage rates have made the average mortgage about twice as much as with the historically low interest rates of the last 15 years.

This is not ideal, as income to mortgage ratio is now worse than it was before the 2007/2008 housing crisis. Average mortgage rates now sit at 7.49%, up from 7.31% just last week. To put that into more context, average interest for mortgages was 6.66% year over year.

Even rates for 15 year mortgages have climbed, though the rise has been slower than the standard 30 year home loan.

No End in Sight

While the fed did not raise rates again in their last meeting, many experts believe they will still raise rates in future meeting(s). It appears mortgage rates will continue to climb. The best hope is they will even out, but that may be wishful thinking.

As long as people in the market obtained rates in the 3 to 4% range, it is tough to see how they will be motivated to move with the rates now at almost 7.5%. For at least the short term, this means less business for notaries, who flock to these types of signings.

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