U.S. mortgage interest rates jump to highest level since 2008

Applied Energetics

15/06/2022 12:00

June 15 (Reuters) - The average interest rate on the most
popular U.S. home loan climbed to its highest level since the
2008 financial crisis and purchase applications were down more
than 15% from last year, Mortgage Bankers Association (MBA) data
showed on Wednesday.
    Still, more homebuyers sought properties compared to a week
earlier, perhaps signalling a flurry of activity before 
aggressive tightening by the Federal Reserve further impacts the
sector.
    Fed policymakers later on Wednesday are expected to raise
interest rates by 75 basis points in order to quell inflation
running at a more than 40-year high. The abrupt move, following
a worse-than-expected key inflation reading last Friday, would
be the biggest U.S. interest-rate hike in decades.  L1N2Y12O3 
    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.
    The average contract rate on a 30-year fixed-rate mortgage
rose by 25 basis points to 5.65% for the week ended June 10, the
highest level since late 2008, towards the end of the financial
crisis and Great Recession.
    The MBA said its Purchase Composite Index, a measure of all
mortgage loan applications for purchase of a single family home,
increased 8.1% from a week earlier and its Refinance Index rose
3.7%.
    But purchase applications were down more then 15% compared
to last year as ongoing record-low housing stock and a lack of
affordability alongside the run up in interest rates have
impacted demand.


 (Reporting by Lindsay Dunsmuir; Editing by Simon Cameron-Moore)
 ((Lindsay.Dunsmuir@thomsonreuters.com; +1 646 384 8221;))