US mortgage interest rates top 6% for the first time since 2008
The average interest rate on America’s most popular home loan has topped 6% for the first time since 2008 and is now more than double the level of a year ago, data from the Mortgage Bankers Association showed on Wednesday. (MBA).
Rising mortgage rates are increasingly weighing on the interest-rate-sensitive housing sector as the Federal Reserve continues to aggressively raise borrowing costs to rein in high inflation. The central bank has raised its overnight lending rate by 225 basis points since March.
Expectations of Fed tightening have driven Treasury yields soaring since the start of this year. The yield on the 10-year note serves as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose 7 basis points to 6.01% for the week ended September 9, a level not seen since the end of the financial crisis and the Great Recession .
The MBA also said its Composite Market Index, a measure of mortgage application volume, was down 1.2% from the previous week and was now down 64.0% from a year ago. one year old. Its refinancing index fell 4.2% from the previous week and 83.3% from a year ago.
US small business sentiment rises in August: NFIB
A worse-than-expected key inflation reading on Tuesday cemented expectations that the Fed will be forced to make a third consecutive 75 basis point interest rate hike at its policy meeting next week, with investors predicting now that the central bank will have to raise rates faster and further than previously thought.
The impact of rising interest rates is being felt throughout the housing sector. New home sales fell to a 6.5-year low in July, while home resales and single-family housing starts are at two-year lows. But house prices remain high amid a critical shortage of affordable housing, making a housing market collapse unlikely.