The recent spike in mortgage rates has begun to take a toll on the housing recovery, with purchase loan applications, pending home sales and new-home sales recently falling, according to Fannie Mae’s latest Economic and Housing Outlook report.

Fannie Mae forecasts that the yield on the 30-year-fixed-rate mortgage should rise to about 5.3 percent by the end of 2013.

“Affordability, while remaining historically high, is becoming an issue for some potential homebuyers, especially first-time homebuyers, who are no longer able to qualify as mortgage rates spiked amid continued rising home prices and anemic income growth,” Fannie Mae said.

“The affordability index for first-time homebuyers fell sharply in the second quarter and will likely post another sizable drop in the current quarter.”

Source: Fannie Mae

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×