U.S. mortgage interest rates jump to 7.16%, highest since 2001

Applied Energetics

26/10/2022 12:17

(Repeats, text unchanged)
       Oct 26 (Reuters) - The average interest rate on the most
popular U.S. home loan rose to its highest level since 2001 as
tightening financial conditions weigh on the housing sector,
data from the Mortgage Bankers Association (MBA) showed on
Wednesday.
    The average contract rate on a 30-year fixed-rate mortgage
rose by 22 basis points to 7.16% for the week ended Oct. 21
while the MBA's Market Composite Index, a measure of mortgage
loan application volume, fell 1.7% from a week earlier. Mortgage
application activity is at its slowest pace since 1997.   
    Mortgage rates have more than doubled since the beginning of
the year, as the Federal Reserve pursues an aggressive path of
interest rate hikes to rein in stubbornly high inflation. 
    The central bank is expected to raise rates by 75 basis
points for a fourth straight time at the conclusion of its next
policy meeting on Nov. 1-2.
    Those actions, designed to cool the economy sufficiently to
curb price pressures, have weighed heavily on the
interest-rate-sensitive housing sector as expectations for Fed
tightening have led to a surge in Treasury yields.
    The yield on the 10-year note  US10YT=RR  acts as a
benchmark for mortgage rates.
 (Reporting by Lindsay Dunsmuir; Editing by Clarence Fernandez)
 ((Lindsay.Dunsmuir@thomsonreuters.com; +1 646 384 8221;))