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Mortgage Rates Hit 5.89%, Highest Level Since 2008

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Mortgage rates hit their highest level in almost 14 years this week, delivering another blow to the rapidly cooling housing market.

The average 30-year fixed mortgage interest rate rose to 5.89%, Hits highest price since Juneaccording to a weekly survey by Freddie Mac released Thursday.

And mortgage rates look set to continue rising. The Federal Reserve is raising interest rates in an attempt to keep inflation in check, which is pushing up borrowing costs across the board.Currently, central banks seems to be on the path This month we will raise another 0.75 percentage points.

The housing market is a key focus for the US Federal Reserve (Fed), and rising costs there are a key factor in this year’s very high inflation. The housing market is also very sensitive to interest rates, making it an area where Fed policy could have a huge impact. Higher interest rates can add hundreds of dollars to a buyer’s monthly mortgage costs.

“We are all focused on the housing sector,” said Fed Vice Chairman Lael Brainard. bank meeting wednesday.

Record-low interest rates during the pandemic have hit the mortgage market hard, with many businesses refinancing borrowers to lower-interest loans, resulting in rapid growth. But rising interest rates have slowed that business down significantly, with some companies laying off workers or closing stores.

A higher rate will cause more buyers to Think twice before buying a home.

When Luke Gardner moved across the country earlier this year, he and his wife returned to renting. , I decided to postpone the purchase when I got to Seattle.

Gardner said he continues to look for a place to buy and is giving up paying more mortgage costs than ever before. However, changes in the housing market have reduced the need to buy a home immediately.

“We are ready to pull the trigger and we can do it financially,” Gardner said. “But we think there may be better days ahead, or if not, we’re okay with renting it for a while.”

nevertheless, wide variation In the rural housing market, some areas cool much more quickly than others.

By the end of July, prices in over 85% of the large housing market were slightly down from their peak.

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More than a tenth of the housing market faced price declines of 4% or more.

The market remains competitive in the Washington, DC area, especially for well-staged homes, said D’Ann Melnick, a real estate agent in the area. But last year’s buying frenzy has subsided, and the balance between supply and demand has become tighter.

“Sellers can’t just throw a house on the market at an inflated price and expect to be able to set terms,” ​​she said.

write destination Ben Eisen [email protected]

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