Mortgage rates jump for third week. How do homebuyers feel?

Mortgage rates rose for the third consecutive week, according to the latest data out from Freddie Mac, pushing the 30-year fixed rate mortgage to 6.44%. Yahoo Finance senior housing reporter Claire Boston breaks the latest mortgage rates and explains the implications this has for potential homebuyers struggling to find affordable options in the US housing market.

To watch more expert insights and analysis on the latest market action, check out more Wealth here.

This post was written by Luke Carberry Mogan.

Video Transcript

Mortgage rates for the week ending October 17th are out.

Our very own Claire Boston joins me on set with the numbers.

Claire, what do we know?

So we saw mortgage rates rise again this week.

This is the third consecutive week gains.

Um, you know, it's bad news for affordability, ultimately, um, but it's good news for the economy because mortgage rates rise when the economy is doing well.

Um, it's all about kind of expectations about what the Fed is going to do.

And right now we see that the Fed is probably not gonna need to cut rates that much.

And as a result, uh, mortgage rates have been ticking up as traders kind of digest that information.

Absolutely.

What does this mean for potential home buyers?

Right, So 6.44% is still more than a percentage point lower than it was a year ago.

So folks, I talked to say that if you're thinking about buying a home, you don't really want to try to time the market, you know, just go when you see a home that you like.

That being said, you know, every take up in mortgage rates does take the affordability issue and make it harder for people who may be looking kind of on the margin.

It says that notably, compared to a year ago, rates more than 1% points lower.

Potential home buyers can stand to benefit here from the release here, as we think to the folks that we've kind of rounded up some of the discussions with I, I talked to the National Association of Home Builders CEO about incentives as well that home builders are offering right now even to offset some of these rates, including buy downs.

And uh, ultimately would love to get your perspective here.

What impact do these incentives like buy downs have on the broader housing market?

Right.

So the fact that mortgage or ho home builders are really aggressively buying down mortgages that can help affordability, you know, for people who are looking to purchase a new home, Um, we're seeing builders sometimes offer buy downs, you know, into even sometimes that 4% range.

And that really does help.

You know, some home buyers afford those purchases.

You know, that being said, um, you know, the longer the mortgage rates overall stay high, the longer the homebuilders are gonna have to offer those incentives.

You know, it does hurt their bottom lines a little bit.

All right, Uh, the Freddie Mac data and the release here also saying, Hey, one of the ways that you could stand to benefit shop around for the best quote as rates can vary widely between mortgage lenders.

Great to have you here, Claire.

With us.

Appreciate it.