Mortgage rates edge higher once again, potentially impacting the Houston real estate market
After months of hitting all-time lows, fixed mortgage rates have been soaring higher, and that trend continued in early July, which could have an impact on activity in the Houston real estate market.
The average 15- and 30-year fixed-rate mortgages increased in the week ending July 11 as a result of market speculation that the Federal Reserve will reduce future bond purchases, according to Freddie Mac's latest Primary Mortgage Market Survey.
Frank Nothaft, Freddie Mac's vice president and chief economist, said June's strong employment report had a major impact on the Fed's decision.
"June's strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed," Nothaft said. "The economy gained 195,000 jobs in June, above the market consensus forecast, while revisions to the prior two months added 70,000 on top of that."
With fixed rates moving higher, applications for new home purchases dropped in June, the Mortgage Bankers Association Builder Application Survey revealed. Should rates continue to rise, buyer activity in Houston could decline.
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