Mortgage rates continued to rise this week. According to Freddie Mac, the average rate on a 30-year fixed mortgage jumped to 6.79% from 6.39% in the first week of May. With rates closer to the 7% benchmark, nearly 5.5 million households continue to be priced out of the market compared to a year ago. Although there are fewer buyers, more than one-third of properties are sold above their list price due to limited inventory, especially of homes that first-time buyers can afford to buy.
However, a couple of government factors will likely help mortgage rates to come down in the following weeks. First, there is positive progress with the debt ceiling deal to prevent our country from a historic default. In the meantime, the Federal Reserve may pause its interest rate hikes later this month. Although these two factors do not directly affect mortgage rates, they affect the economy and eventually mortgage rates.