Long-term mortgage rates are now at their highest since 2008

Buying a house

Rising interest rates have cooled a housing market that has been boiling for years.

Construction of a multi-unit unit was underway in the South Las Vegas Valley in April. (Jeff Scheid/Nevada Independent via AP/File) The Associated Press

WASHINGTON (AP) — Average long-term U.S. mortgage rates jumped again this week, hitting the highest levels in nearly 14 years and pushing even more potential buyers out of the market.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate jumped to 5.89% from 5.66% last week. This is the highest long-term rate since November 2008, just after the housing market crash triggered the Great Recession. A year ago, the rate was 2.88%.

The average rate on 15-year fixed-rate mortgages, popular among those looking to refinance their homes, rose to 5.16% from 4.98% last week. It’s the first time the 15-year rate has been above 5% since 2009, when the housing market entered a multi-year slump. Last year, at this time, the rate was 2.19%.

Rising interest rates — in part due to aggressive pressure from the Federal Reserve to rein in inflation — have cooled a housing market that has been boiling for years. Many would-be home buyers are being pushed out of the market as higher rates have added hundreds of dollars to monthly mortgage payments. Sales of existing homes in the United States have fallen for six consecutive months, according to the National Association of Realtors.

Mortgage rates do not necessarily reflect Fed rate hikes, but tend to track the yield of the 10-year Treasury. This is influenced by a variety of factors, including investor expectations for future inflation and global demand for US Treasuries.

Recently, faster inflation and strong economic growth in the United States caused the 10-year Treasury rate to skyrocket to 3.27%.

The Fed has raised its benchmark short-term interest rate four times this year, and Chairman Jerome Powell has said the central bank will likely have to keep interest rates high enough to slow the economy “for a while. time” in order to tame the worst. inflation in 40 years.


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