US mortgage rates have jumped to their highest level in more than 20 years.
Average 30-year fixed mortgage rates hit 6.92% this week, according to a survey of lenders released by the mortgage giant on Thursday.
Many lenders offer interest rates well above 7%. A year ago the average rate was 3.05%.
A recent jump 6.66% 1 week ago, took rates above the peak of the previous financial crisis. The benchmark is up almost 2 percentage points since August, adding to the already robust gains since the Federal Reserve. started to raise Earlier this year.
The recent climb was especially painful For residential marketThe added monthly cost of paying off a mortgage at a higher interest rate makes home ownership out of reach for many would-be buyers.
Buyers earning median household income and putting in 20% down can afford homes worth about $339,000 this week. According to Realtor.com, a listing website run by The Wall Street Journal’s parent company, the buyer could have bought the home for about $449,000 in January.
of median cost of existing housing $389,500 in August.
Rising interest rates further cooled the housing and mortgage markets. The volume of mortgage interest rate locks has fallen 30% in the past three months, down nearly 60% from last year’s levels, according to the Reuters.
Black Knight Ltd,
Mortgage technology and data provider. In particular, the interest rate lock for those who refinance to withdraw cash from their homes has dropped by more than 26% between August and September.
“It’s just that the phone isn’t ringing. It’s really, really quiet,” said Michael Menatian, president of Sanborn Mortgage Corporation.
Mortgage interest rates tend to go up and down depending on the 10-year Treasury yield. Trading at around 4%The cost of borrowing has risen across the board since central banks launched aggressive campaigns to curb inflation.
Freddie Mac CEO Sam Cater said: The economist said in a statement.
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