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The average 30-year mortgage rate climbed to 5.89%, the highest level since 2008, according to new data published Thursday by Freddie Mac. The increase comes after a period this summer that saw mortgage rates briefly decline even as the Federal Reserve raises the key interest rate to fight inflation. Markets have been closely watching the Fed's moves since the interest rate hikes began in March. "Rates are reacting to Federal Reserve Chair Jay Powell’s comments following last week’s jobs report in which he reiterated his unwavering focus on bringing inflation down to its 2% target level," said Lisa Sturtevant, chief economist at Bright MLS, a real estate data firm, in an email. In remarks Thursday morning, Powell signaled the Fed intends to keep rates higher for longer. “History cautions strongly against prematurely loosening policy,” the central bank leader said in a Q&A presented by the Cato Institute, a libertarian think-tank based in Washington, D.C, according ...

The average U.S. 30-year mortgage rate surpassed 7% for the first time in two decades, mortgage giant Freddie Mac said Thursday. As of Oct. 27, the average rate hit 7.08%, the highest level since April 2002 and one that Freddie Mac said is "leading to greater stagnation in the housing market." "As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month," it said. "In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward." Home price gains decelerated at a record pace in August according to the S&P CoreLogic Case-Shiller Home Price Index, cooling from 15.6% to 13% on an annual basis . But home prices are still climbing, having increased from $449,300 to $454,900 in the third quarter, according to U.S. census data. Meanwhile, the national median mortgage payment was $1,941 in September, up ...

WASHINGTON — Home buyers feeling financially squeezed by higher interest rates are increasingly being steered by real estate agents and mortgage brokers to potentially riskier types of mortgages, similar to those seen ahead of the 2008 financial crisis, causing concern among some consumer advocates and industry analysts.  Among the loans being promoted to home buyers are adjustable rate mortgages, so-called 2-1 buydowns, which artificially lower rates for the first two years, and interest-only mortgages in which borrowers pay a lower monthly payment for several years by only paying the loan interest, according to interviews with real estate professionals, industry data and a review of marketing material from real estate agents and mortgage brokers.  In all instances, borrowers can find themselves with monthly payments that increase by hundreds of dollars a month after the introductory period, a dynamic seen in the run-up to the last housing market crash when predatory lending resulted...

The average 30-year mortgage rate has climbed to 6.02% — the first time the figure has surpassed 6% since 2008, according to new data from mortgage giant Freddie Mac. The new rate level — double what it was this time last year — is an effect of the Federal Reserve's aggressive campaign to raise interest rates as it works to fight inflation. The impact of higher rates will be to reduce housing demand and put downward pressure on home prices , Freddie Mac Chief Economist Sam Khater said in a statement. Yet thanks to a nationwide housing shortage, property values will not fall very much, Khater said. The median price for existing homes rose 10.8% in July from a year earlier to $403,800, the National Association of Realtors said last month. “Home prices are still rising by double-digit percentages year-over-year, but annual price appreciation should moderate to the typical rate of 5% by the end of this year and into 2023,” NAR Chief Economist Lawrence Yun said. “With mortgage ra...

Housing affordability in the U.S. has fallen to its lowest level since 1989, as both mortgage rates and home prices have surged, while income growth crawls at a much slower place. For the first time, median home prices have eclipsed $400,000, landing at $440,300 in the second quarter of 2022, according to data from the Federal Reserve Bank of St. Louis. Meanwhile, 30-year fixed mortgage rates were 5.60% in June, compared with 3.03% just one year ago. That increase is due in part to the Federal Reserve's decision to raise its key interest rate — which has happened four times so far this year — as it seeks to fight spiraling inflation. The National Association of Realtors (NAR) defines a qualifying income , or the income necessary to afford a mortgage, as being one that allows a homeowner to put no more than 25% of family income toward the monthly payment for a 30-year fixed mortgage loan, including a 20% down payment. Today, the association says a qualifying annual income in the ...

Rising mortgage rates and inflation in the wider economy caused housing demand to drop sharply in June, forcing home prices to cool down. Home prices are still higher than they were a year ago, but the gains slowed at the fastest pace on record in June, according to Black Knight, a mortgage software , data and analytics firm that began tracking this metric in the early 1970s. The annual rate of price appreciation fell two percentage points from 19.3% to 17.3%. Price gains are still strong because of an imbalance between supply and demand. The housing market has had a severe shortage for years. Strong demand during the coronavirus pandemic exacerbated it. Even when home prices crashed dramatically during the recession of 2007-09, the strongest single-month slowdown was 1.19 percentage points. Prices are not expected to fall nationally, given a stronger overall housing market, but higher mortgage rates are certainly taking their toll. What does a low mortgage demand mean for buyers, s...