Mortgage rates reach highest since August 2007
The 30-year fixed-rate mortgage (FRM) averaged 6.29 percent.
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Mortgage rates moved higher again this week, with the 30-year fixed-rate averaging 6.29%, up from 6.02% last week, Freddie Mac said. A year ago at this time, the 30-year FRM averaged 2.88%. That’s the highest since August 2007, a year before a crash in the housing market triggered the Great Recession.
The 15-year fixed-rate mortgage averaged 5.44%. Last week they averaged 5.21%. A year ago at this time, the 15-year FRM was 2.15%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.97%. Last week the average was 4.93%. A year ago at this time, the 5-year ARM was 2.43%.
Houses under construction at the Norton Commons subdivision in Louisville, Kentucky, US, on Friday, July 1, 2022. Photographer: Luke Sharrett/Bloomberg via Getty Images (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
"The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011," said Sam Khater, Freddie Mac’s Chief Economist.
Sam continued that "impacted by higher rates, house prices are softening, and home sales have decreased. However, the number of homes for sale remains well below normal levels."
Senior woman at home
EXISTING HOME SALES DROP IN AUGUST TO LOWEST LEVEL SINCE 2020
Rapidly rising mortgage rates threaten to sideline even more homebuyers after more than doubling in 2022. Last year, prospective homebuyers were looking at rates well below 3%.
On Wednesday, the Federal Reserve bumped its benchmark borrowing rate by another three-quarters of a point in an effort to constrain the economy, its fifth increase this year and third consecutive 0.75 percentage point increase.
Perhaps nowhere else is the effect of the Fed’s action more apparent than the housing sector. Existing home sales have been in decline for seven straight months as the rising cost to borrow money puts homes out of reach for more people.
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The National Association of Realtors said Wednesday that existing home sales fell 0.4% last month from July to a seasonally adjusted annual rate of 4.80 million.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FMCC | FEDERAL HOME LOAN MORTGAGE CORP. | 3.1 | +0.00 | +0.00% |
The Associated Press contributed to this report.