U.S. mortgage rates soared to their highest level since June, adding pressure to a housing market that has seen demand plummet since its peak during the pandemic.
His 30-year loan average rose to 5.55 percent from last week’s 5.13 percent, Freddie Mac said in a statement yesterday. The latest surge is his first since 2013, aside from his week in mid-June when interest rates rose his 55 basis points.
Interest rates tracked the rise in 10-year government bond yields, surpassing 3% for the first time in a month this week. Investors prepare for the next move by the Federal Reserve. The Fed has raised its benchmark interest rate to keep inflation at its highest level in decades.
Soaring house prices and soaring mortgage rates this year have pushed many would-be buyers out, cooling deals in a swift turnaround that has shocked the entire real estate industry.
Home sellers are cutting asking prices and brokers are laying off workers. Builders are delaying the start of construction while increasing incentives to attract customers as inventories pile up.
Some nonbank lenders are struggling to stay in business as mortgage applications remain at a 22-year low.
“Rising mortgage rates combined with slowing economic growth are weighing on the housing market,” Sam Cater, chief economist at Freddie Mac, said in a statement.
“Home sales continue to decline, prices are moderate and consumer confidence is declining. But amid faltering demand, potential homebuyers are still sitting on the sidelines and re-entering the market. I am waiting for
At the current 30-year average, a borrower with a $300,000 (€300,000) mortgage would pay $1,713 a month, about $430 more than at the end of last year.