The average US 30-year mortgage contract price jumped to 6.25% last week, the fifth consecutive advance and the highest since October 2008, illustrating the growing challenge of the US housing market.
The Mortgage Bankers Association (MBA) figures showed on Wednesday that the rate rose by nearly a quarter of a percentage point, the highest level since mid-June, as Treasury yields interact with federal policy efforts aimed at stamping out inflation.
Adjustable mortgage lending (ARM) also increased, with the five-year average contract rate jumping 31 basis points to 5.14%. Later on Wednesday, Fed policy makers are expected to raise the benchmark lending rate by 75 basis points for the third consecutive meeting.
The rapid rise in mortgage rates this year has cooled the US housing market, resulting in lower sales and pressure on home prices. Other measures of mortgage rates have also put numbers above 6%. Last week, Freddie Mac data, released Thursday, showed that the average 30-year loan crossed the 6% threshold for the first time since 2008. Mortgage News Daily, which is updated frequently, puts the 30-year average at 6.47%.
While the weekly MBA gauge of mortgage applications increased last week from the week before, home purchases were down nearly 30% from a year ago, while refinancing is down nearly 83%.
The MBA survey, conducted weekly since 1990, uses responses from mortgage, commercial, and thrift bankers. The data covers more than 75% of all residential mortgage applications for individuals in the United States, according to Bloomberg.
Rising interest rates and continuing high home prices in the United States have reduced the ability of many Americans to buy homes for them, while the latest numbers and surveys show that the ability to buy homes in the United States today is the worst since the era of President Ronald Reagan more than 37 years ago. .