Interest Rates Are Bi-Polar

Mortgage rates reversed course this week, rising slightly over the past week and reaching their highest level since late June, Freddie Mac reports.

“The next few months will be key for gauging the health of the housing market,” says Sam Khater, Freddie Mac’s chief economist. “Existing sales appear to have peaked, sales of newly built homes are slowing, and unsold inventory is rising for the first time in three years.”

Affordability pressures are mounting in many markets, with the combination of continuous price gains and higher mortgage rates, Khater says. These factors “appear to be giving more prospective buyers a pause,” he says. “This is why new and existing-home sales are not breaking out this summer despite the healthy economy and labor market.”