Mortgage rates have mostly drifted sideways this summer. This stability is much needed for home sales, which have crested because of the multi-year run up in prices, tight affordable inventory and this year’s higher rates. Going forward, the strong economy will support the housing market, but with affordability pressures mounting, further spikes in mortgage rates will lead to continued softening in home price growth.

The 30-year fixed-rate mortgage drifted up for the second consecutive week to 4.60 percent.
The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months. Yesterday, the Federal Reserve passed on raising short-term rates, but with the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in coming months.
Even with home price growth easing slightly in some markets, mortgage rates hovering near a seven-year high will certainly create affordability challenges for some prospective buyers looking to close.