U.S. Real Estate Market: Rise in Mortgage Rates Continues

American mortgage rates are rising relentlessly and have increased for the fifth consecutive week. The average interest rate on a 30-year fixed-rate mortgage climbed from 6.54% last week to 6.72%, according to Freddie Mac. This ongoing increase in borrowing costs significantly reduces the purchasing power of prospective homebuyers, who are already struggling with a lack of affordable housing options. Additionally, uncertainty about the outcome of the presidential election is causing hesitancy among potential buyers. Strong economic data supports the arguments for a slower pace of rate cuts by the Federal Reserve, which will meet next week. An inflation indicator published in September showed the largest monthly increase since April. The latest employment report is also eagerly anticipated. Sam Khater, Chief Economist at Freddie Mac, expressed optimism: It seems that mortgage rates have reached a peak, and it is not expected that they will return to the highs seen earlier this year. However, the situation remains volatile, influenced by upcoming events such as the labor market report, the 2024 elections, and the Federal Reserve's interest rate decision. Interest in the real estate market remains resilient: Buyers are willing to act when rates fall. Last month, the number of purchase agreements for existing homes rose more sharply than it had in over four years, reported the National Association of Realtors.