High rates grip US housing as mortgage costs are seen rising next year

US long-term mortgage rates are expected to remain on an upward trend next year, adding downward pressure on homebuying demand and housing prices. In an October 16 interview with David Lin, Ron Butler, principal mortgage broker at Butler Mortgage, said US mortgage rates are likely to rise further as government bond yields climb globally. Butler said elevated 30-year fixed rates are suppressing demand. Buyers without an urgent need to move are likely to remain on the sidelines rather than purchase a home at current borrowing costs. Borrowers choosing adjustable-rate mortgages are assuming rates have peaked or will decline, Butler said, warning that this assumption could prove wrong. Butler cited increasingly bearish sentiment among fixed-income executives in Canada and the US toward long-term government bond yields.

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