Economic Report: ‘The housing market may have to go through a correction’: Mortgage rates hit 6.29%, Freddie Mac says

by | Sep 22, 2022 | Stock Market

The numbers: U.S. mortgage rates continue to climb, adding hundreds of dollars in costs to potential homeowners. The increase in mortgage rates followed the Federal Reserve hiking interest rates again to address the worst inflation the economy has faced in 40 years. 

The 30-year fixed-rate mortgage averaged 6.29% as of September 15, according to data released by Freddie Mac on Thursday.  That’s up 27 basis points from the previous week — one basis point is equal to one hundredth of a percentage point. The rise in rates is bad news for prospective buyers, as it potentially adds hundreds of dollars to their mortgage payments. Mortgage rates are now at highs last seen since 2008, Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement. The typical mortgage applicant’s monthly payment is $456 more than in January, he added. Given the rise in rates and buyers pulling back, the median price of an existing home in the U.S. fell to $389,500 in August from $403,800 the previous month, the National Association of Realtors said. A year ago, the 30-year mortgage rate was at 2.88%. The average rate on the 15-year mortgage also rose over the past week to 5.44%. The adjustable-rate mortgage averaged 4.97%, up from the prior week. “The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011,” Sam Khater, chief economist at Freddie Mac, said in a statement. “Impacted by higher rates, house prices are softening, …

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