Topline
Mortgage rates are now at their highest level since the peak of the Great Recession, according to data released Thursday by mortgage provider Freddie Mac.
A home for sale sign in Florida.
Key Facts
Freddie Mac reports the 30-year fixed mortgage rate is 6.02%, up from 5.89% last week.
That’s the highest it’s been since the 6.46% rate on October 30, 2008—just two weeks after the Dow Jones Industrial Average had its worst week ever at the time, falling 18%.
Rates are more than double what they were one year prior, when they were 2.86%.
Key Background
The rise in mortgage rates comes as the Federal Reserve pursues aggressive rate hikes to tampen red-hot inflation. It’s unlikely that prospective home buyers will receive relief any time soon, as Tuesday’s worse than expected inflation report sent markets tumbling and led some investors to predict a 100 basis-point rate hike could be in the cards.
Crucial Quote
Sam Khater, Freddie Mac’s chief economist, attributed the rise in rates in a statement to the “hotter-than-expected inflation numbers this week.” Khater said that though the high mortgage rates should weaken demand for homes, the decline in home prices “should not be large” as inventory remains inadequate.
Further Reading
Mortgage Rates Hit Highest Level Since 2008 In Latest Bleak Sign For Housing Market (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/09/15/mortgage-rates-surpass-6-for-first-time-october-2008/