Mortgage rates rose for the fifth straight week and again hit their highest level since the financial crisis.
Average interest rates for 30-year fixed mortgages rose to 6.29%, according to a lender survey released Thursday.
It was the second week in a row that the yield exceeded 6%. The last time rates were this high was in October 2008, when the US was in deep recession.
The sharp rise is another fruit of the Federal Reserve’s containment campaign. decades of high inflation. on wednesday, The central bank raised interest rates 5th time this year. Officials indicated a larger increase was on the way, even if such a move risks a recession.
A year ago, the mortgage interest rate was 2.88%.
Rising interest rates affect virtually every corner of the economy, The impact on housing is particularly severe Because higher interest rates can easily add hundreds of dollars to a buyer’s monthly mortgage payment.
Suppose a borrower wants to buy a $500,000 house with a 20% down payment. With a 2.88% mortgage, you can expect to pay about $200,000 in interest over 30 years on a $400,000 loan, according to Bankrate.com’s mortgage calculator. With a 6.29% mortgage, the borrower can pay more than $490,000 in interest.
Higher rates have significantly cooled homes. House prices continue to rise each year prices are falling every month. Many prospective buyers Homeownership prices are fallingMany homeowners feel stuck because selling their home means taking out a mortgage with a very high interest rate.
According to the Mortgage Bankers Association, the median national mortgage payment was $1,839 in August, up 33% year-to-date.
Mortgage rates don’t automatically change when the Federal Reserve raises rates.It typically rises or falls in line with the 10-year Treasury benchmark yield, which is Highly influenced by Fed interest rate expectations10-year yields hit their highest level since 2011 this week.
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