The interest rate on US-most popular mortgages rose 5% for the first time in over a decade, extending a rapid increase that has yet to slow down the housing market.
- Interest on the average 30-year fixed-rate mortgage rose from 4.72% a week ago to its highest level since early 2011. Fifteen months ago, mortgage rates stood at an all-time low.
- Rates’ fastest three-month surge since 1987 has led to the housing market being ground zero for Fed’s efforts to control inflation.
- Homebuyers are struggling with a significant increase in financing expenses, further expanding monthly payments.
- Earlier year, purchasing the median American home at prevailing rates signaled a monthly mortgage bill of nearly $1,223 after making a 20% down payment.
Interest rates are soaring in the economy, upgraded by the Fed’s plans to hike benchmark overnight-lending costs and cool its support for bond markets.
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Source: The Wall Street Journal