Mortgage rates rise to 20-year high, leading to sharp decline in home sales

The numbers: Mortgage rates have risen to a 20-year high.

Follow data released by Freddie Mac on Thursday.

That is the highest level since April 2002.

Rates are up 2 basis points from last week – one basis point is equal to one hundredth of a percentage point, or 1% of 1%.

Last week, the 30-year forward was at 6.92%. Last year, 30 years average at 3.09%

It should be noted that Mortgage News Dailyfollowed the daily movement of mortgage rates, notably the 30-year term at 7.22%.

The average interest rate on a 15-year mortgage has increased to 6.23%.

“Mortgage rates have slowed their upward trajectory this week,” said Sam Khater, chief economist at Freddie Mac
said in a statement.

He added: “The 30-year fixed-rate mortgage continues to hold at 7% and is negatively impacting the housing market in the form of a drop in demand.

“The 30-year fixed-rate mortgage continues to be at just 7% and is negatively impacting the housing market in the form of reduced demand.”

– Sam Khater, chief economist at Freddie Mac

For example, existing home sales continued to decline for eight consecutive months, The National Association of Realtors said on Thursday. They fell 1.5% to a seasonally adjusted annual rate of 4.71 million in September. The last time they fell to this level was May 2020.

Furthermore, the number of homes sold last month was down 25% year over year and new listings were down 22%, Redfin said.
+ 2.29%

said Wednesday. Redfin says these are the largest declines on record, except for the early months of the pandemic.

Chen Zhao, head of economic research at Redfin, said, “The US housing market is at a different stage of deadlock, but the dynamics are completely different from those that caused the standstill at the start of the pandemic. said in a statement.

“Besides, Bodybuilder’s confidence has dropped to half what it’s only six
several months ago and construction, especially single-family residential construction,
keep slowing down,” added Khater.

The average adjustable mortgage rate was 5.71%, down from last week.

Affected by high rates, buyer apprehension pushed mortgage applications to their lowest levels since 1997, The Mortgage Bankers Association said.

Yield on 10-year Treasury note

rose above 4.17% in Thursday morning trading, suggesting further upside is likely.

Diane Swonk, chief economist at KPMG US wrote on Twitter

: “The road ahead is difficult and what I call the canary in the coal mine, the house, seems to be sending an ominous signal about where we are and where we are going. Hard.”

(Bill Peters contributed to this report.)

Are you thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]


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