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Mortgage rates for Sept. 15

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Mortgage rates have risen above 6% for the first time in 14 years as inflation has so far resisted the Federal Reserve’s (Fed) efforts to contain inflation. The dramatically rapid escalation is cooling the US housing market and increasing pressure on an economy plagued by relentless inflation.

according to latest data Freddie Mac’s 30-year fixed rate average surged to 6.02% on Thursday, averaging 0.8 percentage points. (A point is a fee paid to a lender equal to his 1% of the loan amount, which is added to the interest rate.) A week ago he was 5.89%, a year ago he was 2.86% did. The last time the 30-year fixed average was this high was in November 2008.

The most popular mortgage product, the 30-year fixed-rate mortgage, has nearly doubled in the last nine months.

Freddie Mac, a federally chartered mortgage investor, aggregates the interest rates of approximately 80 lenders nationwide to come up with a weekly national average. The study is based on home purchase mortgages. Refinancing rates may vary. We use interest rates for quality borrowers with high credit scores and large down payments. Due to standards, these rates are not available to all borrowers.

Monthly rents in South Florida this summer are more than 24% higher than they were a year ago, according to data. (Video: Luis Velarde/Washington Post)

The average 15-year fixed rate jumped to 5.21%, averaging 0.9 points. A week ago he was 5.16% and a year ago he was 2.12%. The five-year average adjustable interest rate rose by an average of 0.2 percentage points to 4.93%. A week ago it was 4.64% and a year ago it was 2.51%.

NerdWallet’s Home and Mortgage Specialist Holden Lewis said: “Their concerns are justified as we learned this week that August inflation was higher than expected, as reflected in the consumer price index. will be reflected in interest rates next week.The Federal Reserve had planned to raise short-term interest rates next week to keep inflation in check.They responded to this week’s unexpectedly high inflation report. It could increase aggressiveness and push mortgage rates even higher.”

Inflation data released this week by the Bureau of Labor Statistics revealed Consumer prices accelerate in August, especially for items such as housing and food. Housing costs he rose 0.7% in August, rising 6.2% annually, the biggest rise since 1991, according to the Consumer Price Index.

Stocks fall after inflation report shows unexpected price gains in August

Inflation in August surprised investors. They wonder if the Federal Reserve would consider raising it by 100 basis points instead of 75 basis points as he did in July. (A basis point is 0.01 percentage points.) The Fed’s Interest Rate Setting Committee will meet next week.

To keep inflation in check, the central bank has raised the federal funds rate four times this year. It started with a 25 basis point gain in March, followed by a 50 basis point gain in May, followed by a 75 basis point gain in June and July. The Federal Reserve probably wants to see signs that inflation is easing before pulling back on rate hikes.

When investors worry about inflation, they are less willing to buy bonds because high inflation reduces their return on investment. Inflation erodes the value of future payments on bonds. When demand falls, bond prices fall and yields rise. Mortgage rates tend to follow the same path as he 10-year Treasury yields, so interest rates will also rise.

Yields on 10-year US Treasuries fell to 3.41% on Wednesday, the highest level since mid-June, after surging to 3.42% on Tuesday.

“The higher-than-expected CPI gave the Fed permission to push for a 0.75-point hike,” said Nicole Roos, produce branch manager for Ruth’s team. It suggests that even a raise is feasible.” “Mortgage rates have already risen in this move due to the surge seen in the last two days.”

Home prices expected to fall, but not crash

Mortgage rates may not have peaked yet, Ruth said.

“The comparative inflation rate of a year ago should replace very low inflation in September 2021,” she said. “Today’s inflationary pressures — Russia, China and now rail strikes — will push the September CPI, announced in early October, even higher. Year-on-year, there will be some comfort, and when inflation falls, so will mortgage rates.”

Bankrate.com Publishing Weekly Mortgage Interest Rate Trend Indexfound that more than three-quarters of the professionals surveyed expect interest rates to rise in the coming week.

“Inflation remains widespread and problematic,” said Greg McBride, chief financial analyst at Bankrate.com. “The Fed will continue to hike rates aggressively, and as the Fed pulls back, there will be a greater supply of mortgage-backed bonds that will need to be absorbed,” he said.

Calculate how much your mortgage costs will increase if interest rates rise

Meanwhile, rising interest rates have dampened demand for mortgages to their lowest level in more than 20 years. The Composite Market Index, a measure of total loan applications, fell for the fifth straight week, falling 1.2 percent last week, according to Mortgage Bankers Association data.

The refinancing index is down 4%, down 83% from a year ago. The purchasing index fell 12%. The percentage of mortgage refinancing accounted for 30.2% of applications.

“The first week of September got off to a slow start for the mortgage market,” MBA president and CEO Bob Broeksmit said in an email. “Because of the drop in sign-ups as it surged to all-time highs.” “With all eyes on the Federal Reserve’s next steps to curb high inflation, borrowers can expect continued volatility in mortgage rates.”

Not only are fewer borrowers applying for mortgages, but some are facing tougher lending standards. The MBA also released the Mortgage Availability Index (MCAI), which showed a decline in availability in his August. The MCAI fell 0.5% last month to 108.3. A decrease in MCAI indicates tighter lending standards and an increase indicates moderation.

“Mortgage availability declined slightly in August as investors reduced their mortgage offerings. [adjustable-rate mortgages] and non[qualifying mortgage] loan program,” MBA economist Joel Kan said in a statement. “With overall origination volumes expected to shrink in 2022, some lenders continue to streamline their operations by phasing out certain loan programs to simplify their offerings. , a weaker economic outlook and signs of slowing home price growth are reducing appetite for riskier loan programs.

“However, what slightly offset these trends was last month’s new [home equity line of credit] product. With total home equity still high, HELOC could benefit borrowers who may not want to give up the current low mortgage rates but want to use their home equity to support other spending plans. I have. “

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