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Mortgage rates increase to highest rate since November 2008

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Mortgage rates surged again last week, approaching 6%, the highest level since 2008, according to Freddie Mac data. ((((iStock).

Mortgage rates rose again last week, approaching 6%, the highest level since November 2008. New arrival data From Freddie Mac.

According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year fixed rate mortgage for the week to June 23 increased to 5.81%.This is from Previous week The average was 5.78%, up from 3.02% last year.

“Fixed rates have risen by more than two percent since the beginning of the year,” said Sam Carter, chief economist at Freddie Mac. “The combination of rising interest rates and rising home prices is likely to be the driving force behind the recent decline in existing home sales, but in reality, many potential homebuyers are still buying homes. Interested and staying competitive in the market, it has been flat for the past two years. Red activity. “

According to Freddie Mac, the average mortgage rate for 2015 also rose to 4.92%. This is 4.81% last week, up from 2.34% last year. In addition, the five-year Treasury indexed hybrid floating rate mortgage (ARM) increased from 4.33% last week and 2.53% last year to 4.41%.

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Interest rates may continue to rise

With mortgage rates continuing to rise, interest rates could rise further as the Fed continues to fight inflation.

“Freddie Mac’s fixed rate doubled for 30 years with a surge of 55 basis points last week, rising 3 basis points to 5.81%, the highest level since November 2008 during the major financial crisis. “That’s what the director of economic research at George Ratiu at Realtor.com said. Investors move towards safer assets due to growing concerns about the recession, following the Fed’s parliamentary testimony that a central bank rate hike could lead to a recession. , Interest rates deviated from the 10-year Treasury slide.

“The Fed seems to be working hard to slow the pace of runaway inflation, which Americans have less dollars in their pockets every month,” Latiu continued. “Consumers are cutting retail spending as gasoline prices rise by about $ 5 per gallon, day care costs rise by double digits and food costs rise. Consumers are cutting retail spending. Increasing pressure to return to the office is discretionary. Spending may fall further in the coming months. “”

At the June meeting, the Federal Reserve Interest rate hike 75 basis points, the highest rate hike since 1994.Prior to that, the Federal Reserve was Interest rate hike 50 basis points in May and 25 basis points in March. And as the Fed fights, further rate hikes are expected from this year to 2023. Decades-High Inflation..

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Mortgage payments surged from last year

As a mortgage rate House prices riseThe cost of buying a home has increased significantly since last year.

“Increasing financial pressure exacerbates the ongoing affordable crisis in the real estate market,” Latiu said. “Rents and home prices continue to rise at double-digit rates. For mid-priced home buyers, the one-two punch of record highs and rising interest rates is about paying monthly mortgages more than last time. Pushed up 64% more annually, adding over $ 800 to the cost of financing. “

However, this rise in costs has also helped to slow the pace of the housing market and rising house prices.

“Market prices will continue to be adjusted to fewer pools of qualified buyers and higher funding costs,” Latiu said. “The transition from an overheated real estate market to a more sustainable market will take time. The good side is, ultimately, more options and better value for more buyers, healthier. You should be able to see the environment. ”

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