U.S. mortgage interest rates rise 6% for the first time since 2008 | Inquirer
 
 
 
 
 
 

U.S. mortgage interest rates rise 6% for the first time since 2008

/ 08:51 AM September 14, 2022

The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed on Wednesday.

Rising mortgage rates are increasingly weighing on the interest-rate-sensitive housing sector as the Federal Reserve pushes on aggressively lifting borrowing costs in order to tame high inflation. The central bank has raised its benchmark overnight lending rate by 225 basis points since March.

Expectations for Fed tightening have led to a surge in Treasury yields since the start of this year. The yield on the 10-year note acts as a benchmark for mortgage rates.

The average contract rate on a 30-year fixed-rate mortgage rose by 7 basis points to 6.01% for the week ended Sept. 9, a level not seen since the end of the financial crisis and Great Recession.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed

A “sold” sign is seen outside of a recently purchased home in Washington, U.S., July 7, 2022. REUTERS/Sarah Silbiger/File Photo

The MBA also said its Market Composite Index, a measure of mortgage loan application volume, declined 1.2% from a week earlier and is now down 64.0% from one year ago. Its Refinance Index fell 4.2% from the prior week and was down 83.3% compared to one year ago.

Read More: Bloom Free Invoice Creator for Contractors

A worse-than-expected key inflation reading on Tuesday cemented expectations the Fed will be forced to deliver a third straight 75-basis point interest rate hike at its policy meeting next week, with investors now predicting the central bank will have to hike rates faster and further than previously thought.

ADVERTISEMENT

The impact of higher interest rates is being felt across the housing sector. New home sales plunged to a 6-1/2-year low in July while home resales and single-family housing starts are at two-year lows. But house prices remain elevated amid a critical shortage of affordable homes, making a housing market collapse unlikely.

Want stories like this delivered straight to your inbox? Stay informed. Stay ahead. Subscribe to InqMORNING

Don't miss out on the latest news and information.
TAGS: Mortgage, Mortgage Rates, US inflation
For feedback, complaints, or inquiries, contact us.
Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.




This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.