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Mortgage rates rise again, challenging housing market

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Interest rates on 30-year mortgages continued to rise last week following the latest inflation readings, according to Freddie Mac. (iStock)

Last week, 30-year mortgage rates rose above 6% for the first time in 14 years as worse-than-expected inflation data hit the market, according to Freddie Mac.

The average interest rate on a 30-year fixed-rate mortgage rose to 6.02% in the week ending Sept. 15, according to Freddie Mac. Leading Mortgage Market Researchis an increase from . previous week The average is 5.89%, significantly higher than last year’s 2.87%.

Other loan terms were also raised this week. Interest rates on 15-year mortgages rose to 5.21% from 5.16% last week, up from 2.18% last year. 5-year Treasury Indexed Hybrid Variable Rate Home Loans (ARMs) also rose to his 4.93%, up from 4.64% the week before and up from 2.43% last year.

“Mortgage rates continued to rise this week with better-than-expected inflation, surpassing 6% for the first time since late 2008,” said Sam Cater, chief economist at Freddie Mac. “It’s holding back, putting downward pressure on house prices, but inventories are still short, which suggests that the decline in house prices is likely to continue, but not by much.”

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Inflation improved slightly in August for second month in a row – what it means

Interest rates rise in response to high inflation

Inflation rate in August shows that consumers are still dealing with high prices despite the Fed’s efforts to contain inflation.

The consumer price index (CPI), a measure of inflation, increased by 8.3% annually in August. Bureau of Labor Statistics. this is 8.5% in July And the highest price in 40 years 9.1% in June.

“While headline numbers have slowed from their June highs, core inflation is stubbornly rising, putting pressure on the Federal Reserve to maintain its aggressive stance on monetary tightening.” Realtor.comSaid.

The Federal Reserve has been raising interest rates to keep high inflation in check.It approved 75 basis points in a row Rate hikes in June and JulyRaitu said it expects to raise interest rates by 75 basis points and possibly as much as 100 basis points during its September meeting.

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Tappable Home Equity hits all-time high

Sellers cut home prices to lure buyers

High borrowing rates mean median home buyers now face $2,100 monthly payments, up 66% from last year, according to Realtor.com.

“With real median household income relatively unchanged, many first-time homebuyers are starting to find the door to home ownership closed this season,” Raitu said. rice field. “With borrowing costs expected to continue rising in the coming months, it is becoming increasingly clear that house prices will need to fall to bring the housing market back into balance.”

Raitu said many sellers have responded to this change in market conditions by lowering their asking prices. experts predict Falling home prices kick off a more balanced market for buyers.

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Mortgage rates fall as inflation improves

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