US mortgage interest rates hit highest level since 2006

Oct 12 (Reuters) – The average interest rate on the most popular U.S. home loan hit its highest level since 2006 as the housing sector continued to feel the brunt of tighter financial conditions, it showed on Wednesday Mortgage Bankers Association (MBA) data. .

Mortgage rates have more than doubled since the start of the year as the Federal Reserve continues an aggressive path of interest rate hikes to reduce stubbornly high inflation.

The measures, designed to cool the economy enough to dampen price pressures, weighed heavily on the interest-rate-sensitive housing sector as expectations of Fed tightening sent Treasury yields soaring. . The yield on the 10-year note serves as a benchmark for mortgage rates.

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FILE PHOTO: A carpenter works on new townhouses that are still under construction in Tampa, Florida, U.S. May 5, 2021. REUTERS/Octavio Jones/File Photo/File Photo

The average contract rate on a 30-year fixed-rate mortgage rose 6 basis points to 6.81% for the week ended Oct. 7, while the MBA Composite Market Index, a measure of the volume of mortgage applications fell 2.0% from the previous week. and is down about 69% from a year ago.

Its Buy Index, a measure of all mortgage applications for the purchase of a single-family home, fell 2.1% from the previous week and is 39% lower than a year ago. is a year old, while the MBA refinance index fell 1.8% last week and is down 86%. from a year ago.

Construction and home sales have weakened significantly in recent months, with home resales posting seven straight months of decline. However, home prices remain high even as home price growth slows, reducing affordability for buyers who are still competing due to a shortage of properties for sale.

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Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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