Based on Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 7.49% in the US as of 5 October 2023, up from 6.66% in October 2022.

“Mortgage rates maintained their upward trajectory as the 10-year Treasury yield, a key benchmark, climbed,” said Sam Khater, Freddie Mac’s chief economist. “Several factors, including shifts in inflation, the job market and uncertainty around the Federal Reserve’s next move, are contributing to the highest mortgage rates in a generation. Unsurprisingly, this is pulling back homebuyer demand.”

Unsurprisingly, driven by higher mortgage rates, pending home sales in the US dropped by 13% in September compared to a year earlier.

National property broker Redfin said that US mortgage rates are sitting near a two-decade high and US home prices rose 3% year-on-year during the four weeks ending 17 September, pushing monthly housing payments to an all-time high.

The firm says that homebuyers are waiting for homes to become more affordable and for more of them to hit the market. Soaring costs have pushed pending home sales down 13% from a year ago. The total number of homes for sale is down 16%, as many homeowners stay put to keep relatively low mortgage rates.