WASHINGTON–Mortgage rates climbed above 6% last week, their highest point since late 2008 and more than double their level at the same time in 2021.
According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage was 6.02% on Sept. 15, up from 5.89% the week before. The average rate for an identical loan was 2.86% the same week in 2021.
“Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “This indicates that while home price declines will likely continue, they should not be large.”
Khater added in the statement that the rate increase will help to cool off the red-hot housing market, but that the number of homes for sale was still inadequate to meet demand.
While the rate on the most popular home loan, the 30-year fixed-rate mortgage, may feel particularly high given its recent history — the rate was 3.72% at the beginning of 2020, and spent much of the past two years below 3%, noted MSNBC.
The Longer View
Taking a longer view, however, rates averaged about 7.8% over the past half-century, according to Freddie Mac, which began tracking borrowing costs in 1971, the report added.
Meanwhile, mortgage applications were largely flat for the week ending Sept. 9, rising 0.2% from the week prior, according to data from the Mortgage Bankers Association. But applications were down nearly 29% compared with a year ago, the MBA added.
In addition, as CUToday.info recently reported, refinancing demand has also plummeted, with applications to refinance home loans down about 4% during the week of Sept. 12 from one week earlier, but were down 83% from the same week the year prior.