Mortgage Rates Skyrocket to 6.71%: Signs of Slowing Housing Market Despite Increase in Home Sales

Mortgage rates have increased, with the 30-year fixed-rate mortgage averaging 6.71% in the week ending June 29, up from 6.67% the week before.

This is a significant increase from a year ago, when the 30-year fixed-rate was 5.70%.

This increase comes despite recent declines in mortgage rates and a rebound in new home sales.

The housing market has shown signs of slowing, with pending home sales dropping more than expected in May, according to data from the National Association of Realtors.

The index shrank 2.7% from April, to 76.5 in May, and pending home sales have now declined for three consecutive months.

However, the lack of housing inventory continues to prevent housing demand from being fully realized.

Investors are also taking in Fed Chairman Powell's comments on rate hikes, which may pose near-term upward pressure on interest rates, including for mortgage rates.

However, it is expected that mortgage rates will decline to near 6.0% by the end of the year.

Mortgage applications have increased recently, as buyers seek alternatives to low inventory of existing homes.

New home sales have been driving this activity.

Despite recent declines in mortgage rates, for much of May rates were higher, which made home buying less affordable.

The national median monthly payment for purchase loan applicants increased 2.5% to $2,165 from $2,112 in April and is up $268 from one year ago, a 14.1% increase.

The shortage of housing supply has worsened the situation for first-time home buyers.

However, builders are taking note of the market need and efforts are being made to increase the supply of lower-priced homes, with the proportion of new homes sold that are priced under $300,000 on an upward trajectory.