Mortgage rates rise to highest level since 2007 after Fed’s latest interest rate cut Get Whole Detail

Mortgage rates rise to highest level since 2007 after Fed’s latest interest rate cut
– #Mortgage #rates #rise #highest #level #Feds #latest #interest #rate #cut

Average long-term U.S. mortgage rates rose more than a quarter-point this week to their highest level since 2007 as the Federal Reserve stepped up its efforts to stem decades-high inflation and a cooling economy.

Mortgage buyer Freddie Mac said Thursday that the 30-year rate rose to 6.29%, changed by +6.02% compared to its previous day. That’s the highest since August 2007, a year before a crash in the housing market triggered the Great Recession.

The average rate for 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, jumped from 5.44% to 5.21% last week. That’s the highest rate since 2008. At this time last year the 15-year mortgage rate was 2.15%.

Fast-rising mortgage rates threaten even more homebuyers after doubling by 2022. Last year, homebuyers were looking at rates below 3%.

On Wednesday, the Federal Reserve lowered its lending rate another third of a point Efforts to control the economy, its fifth increase this year and an increase of 0.75 percent in a row.

Perhaps nowhere is the impact of the Fed’s action more apparent than in the housing sector. Existing home sales have fallen for seven straight months as rising mortgage rates make housing more affordable.

The National Association of Realtors said on Wednesday that the sale of existing homes down from 4.8 million last monthdown 0.4% from July. Home sales have fallen nearly 20% over the past year and are at their slowest pace since May 2020.

See also  Peter Obi Gained’t Get 25% Of Votes In 24 States – Patrick Obahiagbon Says › Viral.Spot72 Get Whole Detail

“Rising mortgage rates have clearly disrupted the housing market,” said NAR Chief Economist Lawrence Yun.

The national median home price rose 7.7% in August from a year ago to $389,500. As the housing market has cooled, home prices have been rising at a moderate pace after rising 20% ​​annually earlier this year. Before the disaster, the median home price was rising 5% per year.

In the four weeks ended Sept. 11, home listings fell 19% from a year earlier, the biggest drop since May 2020, real estate brokerage Redfin found.

Many potential buyers are leaving the market as higher rates add hundreds of dollars to their monthly mortgage payments. High home prices and interest rates have pushed mortgage payments from $897 to $1,643 a month, an 83% increase over the past three years, according to Zillow.

On the other hand, many homeowners are reluctant to sell because they are likely to be locked into a much lower price than they would get on their next mortgage.

MoneyWatch: US mortgage rates rise 6% for first time since 2008 as applications fall

02:50

The Fed’s action on Wednesday raised the short-term benchmark rate, which affects many consumer and business loans, to 3% to 3.25%, the highest level since early 2008.

Every 0.25 percent increase in the Fed’s interest rate translates into an additional $25 per year in interest on a $10,000 loan. That means the last 0.75-point increase will add an additional $75 in interest for every $10,000 owed.

But that’s on top of borrowing costs that have already jumped this year. The Fed’s five rate hikes so far in 2022 are a combined 3 percentage points, or $300 in interest on every $10,000 in debt.

See also  Estimated Fuel Price Increase in September 2022 - Viral.Spot72 Explained

Fed officials forecast they will raise their target rate to about 4.4% by the end of the year, a full point higher than they expected as recently as June. And they expect to raise the rate again next year, to 4.6%. That would be the highest level since 2007.

By raising the cost of borrowing, the Fed makes it more expensive to take out a loan or a business or auto loan. Consumers and businesses are then expected to borrow and spend less, cooling their economies and reducing inflation.

“The slowdown in housing prices that we’re seeing should help bring price patterns more closely in line with rents and other housing market fundamentals, and that’s a good thing,” Fed Chairman Jerome Powell said Wednesday at a news conference. and he talked about the last level. walk

Borrowing rates don’t necessarily reflect the Fed’s rate hikes, but tend to track the yield on the 10-year Treasury note. That was influenced by various factors, including investors’ expectations of future inflation and global demand for US Treasuries.

Recently, rapid inflation and economic growth in the United States sent the 10-year Treasury rate higher, to 3.65%.

download%20video

Stay Connected with Viral.Spot72.com – Follow for more updates, you will be notified soon. Thank You For Visiting

Watch More and Full Videos Here.

Sharing Is Caring:

Leave a Comment

x