By Alex Veiga and Matt Ot — The Associated Press
Average US mortgage interest rates soared this week to their highest level in 20 years, making borrowing even more expensive for homebuyers in a highly competitive housing market due to a shortage of homes for sale.
Mortgage firm Freddie Mac said Thursday that the average benchmark rate for 30-year mortgages, which stood at 6.96% last week, rose to 7.09%.
A year ago, this rate was 5.13%.
[¿Aspira a comprar una casa en 2023? Así se espera que bajen los intereses para las hipotecas]
This is the fourth consecutive weekly increase in mortgage rates and is the highest recorded since early April 2002, when it stood at 7.13%. The last time the average rate exceeded 7% was in November, when it stood at 7.08%.
High rates can add hundreds of dollars a month to borrowers’ costs, limiting their options in a market already unaffordable for many Americans.
The latest rate hike follows a strong rally in the 10-year Treasury yield, which has topped 4% this month and is still rising. The yield, which lenders use to price mortgages and other credit, stood at 4.30% on Thursday, its highest level in almost a year.
The yield has been rising as Treasury traders react to reports showing the US economy remains remarkably resilient, which could keep upward pressure on inflation, giving the Fed reason. Federal to keep interest rates high for longer.
“The economy is doing better than expected and the 10-year Treasury yield has risen, causing mortgage rates to rise,” said Sam Khater, chief economist at Freddie Mac. due to affordability difficulties, but low inventory remains the main cause of stagnant home sales“.
High inflation caused the Federal Reserve to raise its benchmark rate 11 times since March 2022, raising the federal funds rate to the highest level in 22 years.
[Estas son las cuatro ciudades de EE.UU. donde se prevé que los precios de las casas colapsen a niveles de la crisis de 2008]
Mortgage rates do not necessarily reflect rate increases from the Federal Reserve, but rather tend to track the yield on 10-year Treasury bonds.
Investor expectations about future inflation, global demand for US Treasury bonds, and what the Federal Reserve does with interest rates can influence mortgage lending.
The average rate on a 30-year mortgage is still more than double what it was two years ago, when it was just 2.86%. Those ultra-low rates spurred a surge in home sales and refinances.
Now, sharply rising rates are contributing to the shortage of available homes because homeowners who took advantage of those low borrowing costs two years ago are now reluctant to sell and buy a new property with higher rates.
[La economía de EE.UU. vuelve a crecer tras medio año de caída: el PIB sube un 2.6% interanual pero persiste el miedo a recesión]
The lack of offer it’s also one of the main reasons why home sales are down 23% in the first half of this year.
The average rate on 15-year fixed mortgages, which are very popular with home refinancers, rose to 6.46% from 6.34% last week. A year ago, the average rate was 4.55%, according to Freddie Mac.
2023-08-17 19:07:26
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