Washington, Oct. 12 (BUS) – The average interest rate on the most popular mortgage in the US rose to its highest level since 2006 as the housing sector continued to bear the brunt of tightening financial conditions, according to data from the Mortgage Bankers Association (MBA) . Show on Wednesday.
Mortgage rates have more than doubled since the start of the year as the Federal Reserve follows a strong path of raising interest rates to bring down stubbornly high inflation, Reuters reports.
These measures, designed to cool the economy enough to curb price pressures, hit the interest rate-sensitive housing sector hard as expectations of a Fed tightening boosted Treasury yields. The yield on 10-year bonds serves as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose 6 basis points to 6.81% for the week ended October 7, while the MBA Composite Market Index, a measure of the volume of mortgage loan applications, fell 2.0% from the previous week. . It is down almost 69% from last year.
Its Purchase Index, a measure of all mortgage loan applications to purchase a single-family home, is down 2.1% from the previous week and is 39% lower than a year ago, while its MBA Refinance Index is down 1.8% last week and down 86. %. a year ago.
Homebuilders and sales have fallen dramatically in recent months, with home resales posting declines for seven consecutive months. However, home prices remain high even as house price growth slows, eroding affordability for buyers who are still competing due to the lack of properties for sale.
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