Mortgage Rate Highest in 8 Years, Affordability Lowest

According to Freddie Mac data, the 30-year fixed-rate mortgage increased 20 basis points to 4.83 percent in October 2018, the highest since early 2011.

The contract rate for new construction homes grew three basis points to 4.67 percent in October, and mortgage rates on purchases of these homes grew 13 basis points through October to 4.75, according to a Federal Housing Finance Agency report. The National Association of Home Builders reports that the Federal Reserve is on pace to continue raising interest rates gradually, including a possible hike in December 2018.

Information compiled by Freddie Mac shows that mortgage rates are continuing to increase after a slight slowdown in the summer months. The 30-year FRM – Commitment rate, inched up considerably by 20 basis points to 4.83 percent from 4.63 percent in September. The October increase of the 30-year FRM – Commitment rate, is the highest level since the beginning of 2011. As a result of rising mortgage rates, affordability is at the lowest level in a decade and new home sales have been soft in recent months.

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