WASHINGTON (AP) — Average long-term U.S. mortgage rates inched up this week ahead of another expected rate increase by the Federal Reserve when it meets early next month.

Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate ticked up this week to 6.94% from 6.92% last week. Last year at this time, the rate was 3.09%.

The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, jumped to 6.23% from 6.09% last week. Last week it climbed over 6% for the first time since the housing market crash of 2008. One year ago, the 15-year rate was 2.33%.

The Fed’s aggressive action has stalled a housing sector that — outside of the onset of the pandemic — has been hot for years.

The National Association of Realtors said Thursday that sales of previously occupied U.S. homes fell in September for the eighth month in a row as house hunters faced sharply higher mortgage rates, bloated home prices and a tight supply of properties on the market.

Sales fell 23.8% from September last year, and are now at the slowest annual pace since September 2012, excluding the steep slowdown in sales that occurred in May 2020 near the start of the pandemic.

Freddie Mac says that for a typical mortgage, borrowers who locked in at the higher end of the rate range during the past year would pay several hundred dollars more than borrowers who signed contracts at the lower end of the range.

Late in September, the Federal Reserve bumped its benchmark borrowing rate by another three-quarters of a point in an effort to constrain the economy and tame inflation. It was the Fed’s fifth increase this year and third consecutive 0.75 percentage point increase. The Fed’s next two-day policy meeting opens Nov. 1, with most economists expecting another big three-quarters of a point hike.

Despite the Fed’s swift and heavy rate increases, inflation has hardly budged from 40-year highs and the labor market remains tight.

Earlier this month, the government reported that America’s employers slowed their hiring in September but still added 263,000 jobs. The unemployment rate fell to 3.5%, matching a half-century low.

Another report from the government last week showed that consumer inflation remained much too high at 8.2%. Combined with the 8.5% inflation at the wholesale level, most economists expect another big increase when the Fed meets in early November.

By raising borrowing rates, the Fed makes it costlier to take out a mortgage and an auto or business loan. Consumers and businesses then presumably borrow and spend less, cooling the economy and slowing inflation.

Mortgage rates don’t necessarily mirror the Fed’s rate increases, but tend to track the yield on the 10-year Treasury note. That’s influenced by a variety of factors, including investors’ expectations for future inflation and global demand for U.S. Treasurys.

Despite a still-robust job market, the government estimates that the U.S. economy shrank at a 0.6% annual rate in the second quarter that ended in June, the second straight quarterly contraction.

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End of year numbers are starting roll out and there still seems to be a divide that is widening. It will break this year and which side reverses will set the course. If the slowing or receding areas of the market shift positive the market solidify and the Fed’s will stay pat and if they expanding areas slow or recede the Fed’s will have to consider lowering rates to stimulate the economy and stem a slowing economy.

Some takeaways this week were early pointers for how the fourth quarter may turn out. One of the reports was Richmond manufacturing contracts. This index is a “gauge of broad activity in the manufacturing sector in one of the districts. It represents a weighted average of the shipments, new orders and employment indices.” In December it contracted by 4 points and is now at -5 and had been negative in four out of the last six months. It reports that shipments, new orders, and capacity utilization declined and inventories built up at a faster pace. It also showed thought that hiring picked up and wage growth grew. It was noted that manufacturers were optimistic and felt the conditions were only temporary. Of the four regional factory indices that have reported in December three have declined and two are in contraction territory. Clearly, this represents that manufacturing activity remains weak.

On a positive note, weekly retail sales rose 0.6% last week and advanced 2.2% y/y. Also, new home sales for November were reported and showed at 1.3% increase to 719,000 but below the consensus of 730,000. The last three months were also revised down by 29,000 units. However, the three-month average sales rate increased up to the highest level since September of 200. This is clear benefit of lower mortgage interest rates. Housing contributes largely to employment so this is an especially significant sign.

Another significant report was durable goods orders. They sagged by 0.2% in November despite a consensus of +1.2%, the most in six months. The biggest culprit was transportation orders led by defense orders. Excluding these it would be flat. On a year over year basis durable goods sank 3.5%, the largest decline since August of 2016. Durable goods are an area of consumer products that do not need to be purchased frequently because they are made to last for a long time, usually three years.

You can see that several reports are strongly showing movement in their direction of expanding and contracting. Well, 2019 brought many surprises to us all and it will be a year to remember. I look forward to providing information for your trades and portfolios this new year. Wishing you all a Happy New Years. Cheers!

If you have questions on a particular company or investment and would like our feedback, contact us at my email below. Our team will research and respond to you with our recommendation and opinion.

Andrew F. Kotyuk, CIMA* is CEO and Principal of Alpha Wealth Management LLC. For questions or investment topics please email me afkotyuk@alpha-wealth.com.

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If buying a home is on your near-future to-do list, experts say that 2020 may be a good year to make it happen. Mortgage interest rates are near historic lows, providing you with the opportunity to finance a new home purchase at a much lower cost.

According to a new forecast from Freddie Mac, mortgage rates will stay in the 3-4 percent range for all of 2020 and 2021, giving prospective homeowners substantial time to plan their purchase. This, combined with modest inflation and a solid labor market, makes for good climate to buy a home with a fixed rate mortgage. For those who are already homeowners, refinancing now may be a good idea.

“For those serious about homeownership, today’s sub 4 percent mortgage rates should not be taken for granted,” says Freddie Mac chief economist, Sam Khater. “For comparative purposes, in 2000, rates averaged eight percent; and in the 80s, they spiked to 18.5 percent.”

Khater stresses that while mortgage rates are an essential factor to consider in the home-buying process, there are other important items to think about as well as you lay the groundwork for your purchase. These include getting a firm handle on your finances, knowing your credit score (and taking steps to boost it if necessary) and familiarizing yourself with down payment options. For more information and tools on home buying and homeownership, visit myhome.freddiemac.

Whether you are making the jump from renting to owning, or looking for a home that better meets your current needs, now may be a great time to consider making your real estate dreams a reality. Today’s low rates could save you money for years to come.

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