Fixed rate mortgages at a nine-month high

Freddie Mac has reported that 30-year fixed-rate mortgages are at an nine-month high. What this will mean for the mortgage market during these critical summer months is anyone’s guess.

My best guess is that, combined with tighter lending standards, especially in subprime, these lending rates will depress the number of first-time home buyers. In all likelihood, this summer will be a bust and prices will need to drop further to spur the type of buying we need in order to start clearing inventory.

Mortgage rates continued their upward climb this week, as growing concern over inflation overshadowed concerns of a slowing economy. Freddie Mac said Thursday morning that its weekly Primary Mortgage Market Survey found rates on a 30-year fixed-rate mortgage (FRM) averaged 6.42 percent, with an average 0.7 point, for the week ending June 19.
–Housing Wire, 20 Jun 2008