US Mortgage Rates Jump to 6.29%, Highest Since October 2008
Mortgage rates in the US rose for a fifth straight week, threatening to freeze more would-be buyers out of the market for homes.
The average for a 30-year, fixed loan surged to 6.29% from 6.02% last week, Freddie Mac said in a statement Thursday. Rates tracked a jump in 10-year Treasury yields, and now are at the highest level since October 2008, the company’s data show.
The Federal Reserve on Wednesday lifted its benchmark rate 75 basis points and signaled more hikes ahead in its effort to cool inflation and the housing market, where Fed Chair Jerome Powell said prices were “going up at an unsustainably fast level.” The move is likely to further boost mortgage rates, which have already almost doubled since the beginning of the year.
Higher borrowing costs have shut down the pandemic housing frenzy, chilling purchases and eroding affordability for buyers still in the hunt. Sales of previously owned US homes fell for a seventh straight month in August, the National Association of Realtors reported Wednesday. It was the longest string of declines since the housing market crashed in 2007.
“The housing market continues to face headwinds,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “House prices are softening, and home sales have decreased. But despite this decrease in sales, the number of homes for sale remains well below normal levels.”