US Mortgage Rates Approach 5% Level
The US housing market is pressured by new risks, as 30-year mortgage rates rise close to the 5% for the first time in years. According to the Mortgage Bankers Association, mortgage rates have increased to 4.97% from 4.23% in January. Including fees, most 30-year mortgage costs have reached 5% or higher.
The US borrowing costs have risen broadly, as the US central bank has raised its benchmark lending rate from near zero three years ago to between 2.00%-2.25% after the central bank's policy meeting last week. It signaled rates would rise further in the months ahead. According to analysts, higher interest rates is a headwind for housing market.
According to S&P/Case Shiller, home prices in 20 major US metro areas grew at 5.9% annual in July. They have slowed for a fourth straight month from a 6.8% pace in February. New home sales fell for two straight months before rebounding to an annualized rate of 629.000 in August. Meanwhile, home resales softened this spring, but stabilized at 5.34 million annualized units in August, remaining down 1.5% from a year ago. Inventory of existing homes rose to 1.92 million last month, the first increase in three years on a year-over-year basis.