Mortgage rates rose for the third week in a row, this time reaching their highest point since July.
Data from the Mortgage Bankers Association shows mortgage rates on 30-year, fixed-rate loans climbed to 4.05% this week—up from 4.02% last week. Averages on FHA loans were slightly lower at 3.83% (up from 3.79% the week prior).
According to Sam Khater, the chief economist for Freddie Mac, the steady stream of upticks hasn’t slowed down buyers much.
“This week marks the third consecutive week of rate increases, which hasn’t happened since April of this year,” Khater said. “That said, purchase activity continues to show strength, indicating obvious homebuyer demand.”
MBA’s data shows mortgage application volume was basically unchanged over the week. Purchase activity increased slightly by 2%, while refinances fell just 1%. Refinances were still 134% higher than a year ago.
According to MBA’s Joel Kan, the strong demand for homes will likely hold steady.
“Considering how much lower rates are compared to the end of 2018, purchase applications should continue showing solid year-over-year gains,” said Kan, MBA’s associate vice president of economic and industry forecasting.
A lack of inventory is one thing that could hold buyers back, according to Khater, who calls the market’s meager housing supply “a major barrier to not just the housing market, but the overall economic recovery.”
Recently released data from Realtor.com confirms inventory is on a steep decline. For-sale properties dipped almost 7% last month and there are nearly 100,000 fewer listings than this time last year.
Fortunately, there may be a silver lining. The share of new listings actually increased in October—the first time in over six months. According to Realtor.com’s senior economic research analyst Sabrina Speianu, “this could be an early indicator of inventory declines moderating.”