Rapid Surge: US Mortgage Rates Exceed 2021 Figures by Triple



Discover the rapid surge in US mortgage rates, which have exceeded 2021 figures by triple. The housing market slump worsens as rates continue to rise for the fifth consecutive week. Explore the impact of high rates on the 30-year fixed rate mortgage, currently at a 23-year high. Learn how inflation and the robust jobs report are influencing this trend, and why the housing market remains a stumbling block.

Discover the rapid surge in US mortgage rates, which have exceeded 2021 figures by triple. The housing market slump worsens as rates continue to rise for the fifth consecutive week. Explore the impact of high rates on the 30-year fixed rate mortgage, currently at a 23-year high. Learn how inflation and the robust jobs report are influencing this trend, and why the housing market remains a stumbling block.


Rapid Surge: US Mortgage Rates Exceed 2021 Figures by Triple | ogusyis

Mortgage interest rates have continued to rise for the fifth consecutive week, exacerbating the ongoing slump in the housing market. The 30-year fixed rate mortgage currently stands at a 23-year high, averaging 7.57% this week, up from 7.49% just a week ago. These figures, derived from the latest Freddie Mac survey, also reveal an increase in the 15-year mortgage rate to 6.89%. Unfortunately, the latest economic data does not offer any signs of relief in the near future. Inflation remains stable at 3.7% in September, surpassing the Federal Reserve's target rate of 2%. Furthermore, the most recent jobs report proved to be robust, indicating the likelihood of another rate hike this year. All these factors suggest that interest rates are likely to remain high for an extended period. If the Federal Reserve continues to prioritize curbing inflation to less than 2%, the stumbling block in the way of achieving this goal is bound to be the housing market.

In the short term, it is anticipated that interest rates will continue to move upwards. Early readings from October 12th indicate that average daily rates for a 30-year mortgage have surged to 7.84%. Though some potential homebuyers are gradually adjusting to this new normal, many are still hesitant to make a move. Even with the increasing number of buyers acclimating to higher rates, the limited inventory of suitable homes keeps prices elevated, further diminishing the purchasing power of hopeful buyers. However, it is important to note that these rates may not remain in the 7% to 8% range in the long run. According to Sturtevant, an expert in the field, average rates in the early 2000s fluctuated around 6% before the financial crisis hit. It is likely that rates will eventually stabilize at around this level once the current market turbulence settles.

Despite the high mortgage rates, there has been a slight increase in mortgage applications this week, as reported by the Mortgage Bankers Association. The 0.6% increase in applications seems to be driven by demand for adjustable rate mortgages, as rates for these loan products experienced a dip last week. However, despite this small uptick in applications, mortgage lenders are still witnessing significantly lower volumes compared to the previous year. Application activity remains subdued and is nearing multi-decade lows, with purchase applications lagging almost 20% behind last year's pace.

Rapid Surge: US Mortgage Rates Exceed 2021 Figures by Triple

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