Topline
Mortgage rates are at their highest level since the Great Recession, according to data released by Freddie Mac Thursday, as housing affordability continues to slump.
A for sale sign is posted outside a home in California.
Key Facts
The 30-year fixed mortgage rate is now 5.89%, according to Freddie Mac, up from 5.66% last week and 2.88% at this time last year.
Mortgage rates are now at their highest since November 2008, when Freddie Mac reported a 6.04% 30-year rate.
Mortgage rates have climbed as the Federal Reserve raises interest rates to tame inflation.
Key Background
A national Bankrate survey of large lenders pegs the average 30-year fixed mortgage rate even higher, at 6.02%. Home sales have steadily decreased in recent months, while prices have increased. In further gloomy signs for the housing market, mortgage applications declined .8% last week amid the rising mortgage rates, while home builder confidence fell to a two-year low last month. The Fed has hiked interest rates four times in 2022, and another 75 basis point hike is expected later this month. It’s unlikely mortgage rates tumble any time soon, as Fed chair Jerome Powell said Thursday the Fed remains “strongly committed” to combating elevated consumer prices and pursuing interest rate hikes.
Crucial Quote
Sam Khater, Freddie Mac’s chief economist, said in a statement: “Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy due to elevated inflation.”
Surprising Fact
The 3.01% rise in mortgage rates over the last year is the largest 52-week increase in rates in over 40 years, according to Charlie Bilello of Compound Capital Advisors.
Further Reading
Stocks Rally Even After Powell Reiterates That Fed Will Keep Raising Rates (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/09/08/mortgage-rates-hit-highest-level-since-2008-in-latest-bleak-sign-for-housing-market/