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<\/a>\u201cThe economy continues to do better than expected, and the 10-year Treasury yield has moved up, causing mortgage rates to climb,\u201d says Sam Khater, chief economist for Freddie Mac. \u201cThe last time the 30-year fixed-rate mortgage exceeded 7% was last November. Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales.\u201d<\/p>\n\n\n\n
The scarcity of resale inventory\u2014largely fueled by the lock-in effect and persistently high interest rates\u2014has caused the share of newly built homes to remain elevated. According to a report from Redfin<\/a>, new homes represented 31.4% of single-family homes on the market in the second quarter, the highest share of any second quarter on record and only a slight decline from the 33.6% share in the first quarter. Redfin says the portion of new homes of all inventory is 30.3% higher than a year ago and nearly double the pre-pandemic share of 17% in the second quarter of 2019.<\/p>\n\n\n\n As mortgage rates continue to rise, mortgage applications have decreased. According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey<\/a> for the week ending Aug. 11, applications decreased 0.8% from a week earlier. The refinance index is 35% lower than the same week a year ago, while the seasonally adjusted purchase index decreased 0.2% from a week earlier.<\/p>\n\n\n\n