Average mortgage rates stabilize after two-month high

Mortgage rates took a small step back due to affordability pressure after climbing for the past two weeks, according to Freddie Mac. This pressure is also being felt on the mortgage application side of the fence as volume keeps tumbling.

"This stability is much needed for home sales, which have crested because of the multiyear run-up in prices, tight affordable inventory and this year's higher rates," said Freddie Mac Chief Economist Sam Khater in a press release. "Going forward, the strong economy will support the housing market, but with affordability pressures mounting, further spikes in mortgage rates will lead to continued softening in home price growth."

"There continues to be a steady rate of job creation, but as we've seen throughout most of this economic expansion, wage growth is not meaningfully increasing above inflation. With home prices still climbing and mortgage rates up from 3.9% a year ago, some prospective buyers are definitely feeling an affordability crunch," Khater added.

The 30-year fixed-rate mortgage averaged 4.59% for the week ending Aug. 9, dropping 1 basis point from last week.

Yields on the 10-year Treasury note, a key indicator in pricing 30-year fixed-rate mortgages, dipped since last week and dropped below the 3% plateau.

The 15-year fixed-rate mortgage also declined, falling 3 basis points this week and averaged 4.05%. The 15-year fixed-rate mortgage averaged 3.18% a year ago.

The average five-year Treasury-indexed hybrid adjustable-rate mortgage fell by 3 basis points as well, to 3.9%. At this time last year, five-year adjustable-rate mortgage averaged 3.14%.