Mortgage rate hikes at their highest level.
This week, mortgage rate hikes to their highest level in 21 years, making it even more difficult for purchasers to finance homes in a market that is plagued by high prices and a lack of supply.
Statistics show that due to mortgage rate hikes, the average 30-year fixed-rate mortgage jumped noticeably from the previous week’s 6.96% to 7.09% over the week ending on Thursday.
The Federal Reserve has proposed a series of mortgage rate hikes in an effort to lower inflation by slowing the economy and limiting demand.
When the Fed implemented its first mortgage rate hikes of the current series in March 2022, the average 30-year fixed mortgage was only at 4.45%, according to data from Mortgage News Daily.
According to Rocket Mortgage, each percentage point in the mortgage rate hikes can result in annual payments rising by thousands or tens of thousands of dollars, depending on the price of the home.
Since May, according to Freddie Mac data, the average interest rate on 30 year fixed mortgages has been higher than 6.5%.
The rate peaked in November at 7.08% marking the previous high for this round of mortgage rate hikes.
Freddie Mac said in a statement on Thursday that while rising home purchase costs have restrained demand, a shortage of supply is the main factor contributing to a stagnant housing market.
Mortgage rate hikes so far seem to have slowed but not jeopardized the country’s economic development.
Home affordability has reached its lowest point in several decades as a result of the Federal Reserve’s historic rate hiking program and mortgage rate hikes.
Due to the mortgage rate hikes, homebuyers find it more difficult to sell their properties, even though they had previously locked in cheaper interest rates.
Home sales are down approximately 20% from a year ago as a result of the pressure put on prospective buyers by high prices and a lack of available inventory.