 "Mortgage")
US mortgage rates surged this week, with the popular 30-year fixed rate hitting the highest level in more than 21 years, further complicating the housing market outlook.
The average 30-year rate shot up to 7.09 per cent the highest level since April 2002, from 6.96 per cent in the prior week, mortgage finance agency Freddie Mac said on Thursday. It is nearly 2 percentage points above where it was the same period last year.
The average 15-year rate also jumped to 6.46 per cent. It was up from 6.34 per cent the week prior and was also the highest level since April 2002. At the same time, the yield on the 10-year Treasury note - which acts as a benchmark for mortgage rates - reached the highest levels in 10 months on Thursday, bolstered by fears that strong U.S. domestic demand could prompt the Federal Reserve to raise interest rates again.
“The last time the 30-year fixed-rate mortgage exceeded seven percent was last November,” said Freddie Mac’s chief economist Sam Khater. “Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales.”
The housing market was affected most immediately and severely by the US central bank’s aggressive monetary policy tightening beginning 2022, but has recently shown signs of stability. On Wednesday, the Commerce Department reported that single-family housing construction surged in July amid an acute shortage.
