US mortgage interest rates jump to 7.16%, highest since 2001
Decades high mortgage rates sink the housing market into a recession
Huntington Bancshares CEO Stephen Steinour breaks down mortgage environment: 'Clearly things are slowing'
Steinour says the industry is seeing a slowdown despite reporting a strong third quarter and discusses the possible impact of the Fed's expected rate hike in November.
The average interest rate on the most popular U.S. home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
The average contract rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended Oct. 21 while the MBA's Market Composite Index, a measure of mortgage loan application volume, fell 1.7% from a week earlier. Mortgage application activity is at its slowest pace since 1997.
A sign is displayed outside a house for sale in Pittsburgh, Jan. 4, 2019. The Biden administration is looking to expand reporting requirements on all-cash real estate deals to help crack down on bad actors' use of the U.S. market to launder money made through illicit activity. | AP Newsroom
US HOME PRICES COULD PLUNGE 20% NEXT YEAR AS MORTGAGE RATES SURGE
Mortgage rates have more than doubled since the beginning of the year, as the Federal Reserve pursues an aggressive path of interest rate hikes to rein in stubbornly high inflation.
The central bank is expected to raise rates by 75 basis points for a fourth straight time at the conclusion of its next policy meeting on Nov. 1-2.
TOP HOUSING MARKETS THIS FALL ARE THOSE WITH AFFORDABLE HOMES
Those actions, designed to cool the economy sufficiently to curb price pressures, have weighed heavily on the interest-rate-sensitive housing sector as expectations for Fed tightening have led to a surge in Treasury yields.
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The yield on the 10-year note acts as a benchmark for mortgage rates.