Mortgage Rates Remain High as Affordability Challenges Persist

Detailed summary

The average 30-year, fixed-rate home loan fell slightly, to 7.11 percent, pushing buyers and sellers to the sidelines until conditions improve.

Mortgage rates slid for the fourth consecutive week but remain above 7 percent, adding pressure to a bleak housing market struggling with rising prices and declining sales.

The rate on the most popular home loan in the United States, the 30-year fixed-rate mortgage, fell slightly to 7.11 percent, from 7.18 percent the week before, the mortgage finance giant Freddie Mac said on Thursday. The same rate averaged 6.24 percent a year ago.

There was hope that mortgage rates might ease below 7 percent, a psychological threshold that could draw more buyers to the market. But industry experts say that marker is not likely to be breached any time soon.

High housing costs have made buying a home unaffordable for many Americans, said Brad Case, the chief residential economist at Homes.com, a real estate search portal owned by CoStar, a data analytics company.

“I don’t think affordability challenges are going away any time soon,” he added, “because I don’t think we’re likely to see substantially lower mortgage rates.”

Squeezed by high mortgage rates and rising inflation, buyers and sellers are sitting out of the market until conditions improve, which has depressed home sales. Sales of existing homes fell 8.8 percent in October from the year before, and 5.5 percent lower than September’s pace, according to a report released Thursday by the National Association of Realtors, a trade group.

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