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Mortgage Rates Rise to 5.66%

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Mortgage rates rose for the second week in a row, continuing the trend of slowing the housing market.

Average interest rates for 30-year fixed mortgages rose to 5.66% this week, according to one bank.

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Lender survey released Thursday. That’s almost double the rate from a year ago, and we’re not far off. peaked at 5.81% in June, the highest level since 2008. At the beginning of 2022, the average rate was 3.22%.

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The steady rise ended the era of ultra-low interest rates that dominated most of the last decade. Rising interest rates and soaring home prices have pushed prospective buyers to make more monthly payments, resulting in fewer transactions.

Declining sales of used homes According to the National Association of Realtors, July saw an increase of nearly 6% from the previous month, reaching a seasonally adjusted annualized rate of 4.81 million. This was the sixth consecutive month of volume declines since 2015 and the slowest pace, outside of the 2020 pandemic-related decline.

Despite forecasts of a cooling housing market in 2022, U.S. home prices are still hitting record highs despite a surge in mortgage rates in recent months. WSJ’s Dion Rabouin explains what’s driving demand, if there are signs of a slowdown, and what that means for the economy. Photo Synthesis: Ryan Trefes

“The typical U.S. family can’t afford a moderately priced home when interest rates rise above 5.75%,” said Nadia Evangelou, senior economist at the National Association of Realtors. , which accounts for about 25% of her annual income before factoring in additional costs such as insurance, taxes and maintenance, she added.

Mortgage Bankers Association data showed refinancing applications for existing mortgages fell 83% last week from a year earlier.

The Federal Reserve has raised policy rates several times this year to combat high inflation, and central bank officials indicates that further increases are underway.

Mortgage rates usually go up or down. Benchmark 10-Year Treasury Yieldhas traded above 3.1% for much of this week. The 10-year yield has risen from about 1.3% over the past year.

write destination Charlie Grant [email protected]

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