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US Housing Market Continues to Weaken as Mortgage Rates Rise, Sentiment Wanes

Martin Baccardax

The U.S. housing market remains a key weakness an otherwise booming economy, with rising rates holding back demand and a slump in new building keeping supply at bay, and could be big drag on consumer spending and sentiment heading into 2019. Thirty-year fixed mortgage rates, the most common form of borrowing, rose to a seven-year high of 4.94% this week, according to data from the Federal Home Loan Mortgage Corporation, or Freddie Mac, while the National Association of Home Builders said its affordability index fell to the lowest level in ten years. The Federal National Mortgage Association, or Fannie Mae's, home purchase sentiment index, a closely-watched metric for housing investors, also slipped 2 points this week to a one-year low of 85.7 points.