Borrowing costs continue to balloon, as the national average for a 30-year fixed mortgage climbed to 4.29 percent this week from 4.22 percent the prior week, according to data from Freddie Mac.
The average rate for a 15-year fixed mortgage also increased – to 3.3 percent from 3.27 percent week-over-week.
Tighter credit will begin to drive down price growth, IHS Global Insight economists Stephanie Karol and Patrick Newport predicted.
“These conditions present temporary challenges for the housing market,” the economists told Bloomberg News. “We expect home prices to decelerate, but growth should continue into next year.”
Home prices in the 20 largest U.S. cities saw the biggest jump since February 2006, according to the S&P/Case-Shiller index released yesterday. The index’s 13.3 percent increase in September eclipsed August’s 12.8 percent increase, and also beat analysts’ expectations of a 13 percent increase. [Bloomberg News] — Mark Maurer