According to a report by mortgage buyer Freddie Mac, 30-year mortgage rates rose to 6.02% from 5.89% last week.
The average U.S. long-term mortgage rate rose above 6% this week for the first time since the 2008 housing crash, threatening to send even more homebuyers out of the way. cool down the housing market.
Mortgage buyer Freddie Mac reported Thursday that the 30-year interest rate rose to 6.02% from 5.89% last week.
The long-term average rate has more than doubled since a year ago and is the highest since November 2008, shortly after the housing market crash that triggered the Great Recession. A year ago, the rate stood at 2.86 percent.
Interest rates rise – partly a result of the Federal Reserve promote to reduce inflation – has cooled down a housing market that has been hot for years.
Many potential home buyers are being pushed out of the market because the higher rate added hundreds of dollars to the monthly mortgage payments. According to the National Association of Realtors, sales of existing homes in the US have fallen for the sixth straight month.
The average rate on 15-year fixed-rate mortgages, popular among those looking to refinance their homes, rose to 5.21% from 5.16% last week . Last year at this time, the rate was 2.19 percent.
The US Federal Reserve has raised its benchmark short-term interest rate four times this year, and Chairman Jerome Powell has said the central bank will likely need to keep rates high enough to slow the economy. some time” to tame the The worst inflation in 40 years.
One Key inflation worse than expected Tuesday’s reading reinforces expectations the Fed will be forced to deliver for the third time in a row Interest rate 75 basis points increased at its policy meeting next week, with investors now anticipating the central bank will have to raise rates faster and further than previously thought.
The effect of higher interest rates has been felt in the housing sector.
New home sales fell to a six-and-a-half year low in July while resale and single-family homes started at a two-year low.
But home prices remain high amid a severe shortage of affordable housing, making it unlikely the housing market will collapse.
The government reports that the US economy shrank at a 0.6% annual rate from April to June, the second consecutive quarter of a recession, meeting an unofficial sign of a recession. .
However, most economists say they doubt that the economy is in or on the brink of a recessionThe US job market remains strong.
Jobless claims fell again last week and remained at their lowest level since May, despite moves by the Fed to curb inflation, which also tends to cool the job market.