2023-10-05 20:48:21
The average mortgage rate in the United States this week reached its highest level since December 2000, making it even more difficult for many people to buy a home.
The average mortgage rate for a 30-year mortgage rose to 7.49% from 7.31% last week, U.S. mortgage agency Freddie Mac reported Thursday. A year ago, the average rate was 6.66%.
The rate for 15-year fixed mortgages, popular among people looking to refinance their loan, also increased: from 6.72% last week to 6.78% this week. A year ago it was 5.90%, Freddie Mac said.
Higher rates can add hundreds of dollars a month for many lenders, limiting what they can pay in a market already inaccessible to many Americans.
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They also discourage the sale of homes for owners who obtained theirs two years ago at very low rates. The average rate now for a 30-year mortgage is more than double what it was two years ago, when it was just 2.99%.
The combination of high rates with little supply in the market has caused home prices to skyrocket, even though sales of previously occupied homes have decreased 21% in the first eight months of this year compared to the same period last year.
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Mortgage applications fell to their lowest point since 1995 last week, according to the Mortgage Bankers Association.
At the same time, the average monthly payment listed on loan applications has been increasing. It was US$2,170 in August, an increase of 18% from a year earlier.
“Several factors — including inflation, the labor market and uncertainty about the Federal Reserve’s future actions — are contributing to the highest mortgage rates in a generation,” said Sam Khater, an economist at Freddie Mac. “As expected , this is depressing the demand for housing.”
Source: AP
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