Another week, another step higher. Freddie Mac reported Thursday that the average 30-year fixed mortgage rate rose to 7.40%, up from 7.28% the week before. The 15-year fixed climbed to 6.73% from 6.60%. One year ago the 30-year sat at 6.30%, so the gap between this fall and last fall is now more than a full percentage point.
In real dollars, principal and interest on a $350,000 loan at 7.40% comes to roughly $2,423 a month. That is about $29 more than last week and about $257 more than at last year's rate. For home buying budgets in Central Utah, that difference can be the line between two price brackets, which is why our team keeps payment math front and center in every conversation right now.
Buyers Hit the Pause Button
The clearest sign of how higher mortgage rates are landing came from Redfin's September data, released today. Signed purchase contracts fell 4% from August to September, reaching their lowest level since 2014 outside of the 2020 lockdown months. Pending sales are a preview of closings one to two months out, so national sales numbers are likely to look soft through the end of the year.
Sellers have not pulled back as quickly. The number of homes for sale rose 1.2% in September to its highest level since March 2020. The most recent National Association of Realtors figures, for August, showed existing-home sales at a 3.98 million annual pace with 4.9 months of supply and a national median price of $429,100, still up 1.6% from a year earlier. NAR's September report is due Tuesday.
Bonds, Oil and a Big Inflation Week
Mortgage rates follow the 10-year Treasury yield, and that yield closed Friday near 5.24%, just below its recent peak of about 5.31%. Mortgage rates are also running roughly 2.2 percentage points above the 10-year, a wider spread than usual. If that spread narrows, mortgage rates could ease a little even without help from the bond market.
Energy remains a headwind. Brent crude finished Friday around $105 a barrel and WTI near $92, as attacks around the Strait of Hormuz continued. Households are feeling it: the University of Michigan's preliminary October consumer sentiment index slipped to 46.3, a five-month low, and year-ahead inflation expectations edged up to 4.7%.
That sets up Wednesday's Consumer Price Index as the key event of the week. The Federal Reserve raised its benchmark rate to 3.75%–4.00% in September and meets again October 27–28. Prediction markets in early October leaned toward a hold this month, but most Fed officials projected at least one more hike this year. A hot CPI reading would likely push yields and mortgage rates higher. A cooler one could offer some relief.
Where Central Utah Fits In
National slowdowns tend to show up more gently in rural markets, but they do show up. Statewide, Redfin data for August showed Utah home prices roughly flat year over year, with sales down about 10.6% and homes taking a median of 55 days to sell. Sevier County is a smaller, more affordable market. Zillow puts the typical home value around $338,000, up about 4.5% over the year through June, well below Wasatch Front price points.
For buyers looking at Sevier County homes or properties in Richfield, Salina, Manti, Ephraim, Nephi or Delta, a slower market means more choices and more leverage. Sellers are increasingly open to covering closing costs or funding a rate buydown, and those concessions can trim a payment more than a small price cut.
For home selling, the message from this week's data is simple: price realistically from day one and make your home easy to say yes to. Buyers are fewer and more payment-sensitive, and well-prepared, well-priced listings are the ones still moving in Central Utah real estate.
Whether you want a side-by-side payment comparison or a fresh estimate of what your home could sell for this fall, the Donavan & Tyson Team is glad to help. Reach out anytime.