US 30-year mortgage rate exceeds 7% for first time in over a year — MarketWatch
In the United States, the average rate on a 30-year fixed-rate mortgage reached 7.07% on September 10, exceeding the 7% mark for the first time in more than a year. According to MarketWatch, citing a Mortgage News Daily survey of lenders, the figure rose by 18 basis points over the past two days.
Rising borrowing costs
Zonda chief economist Ali Wolf noted that rates at the 7% level are already a reality for many consumers. According to her, investor concerns about inflation and the level of government debt are raising borrowing costs for borrowers.
Mortgage rates do not directly depend on the Federal Reserve's benchmark short-term rate. Instead, they usually move in tandem with yields on 10-year US Treasury bonds, which rise when investors expect inflation.
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Pressure on the housing market
Realtor.com senior economist Anthony Smith linked high oil prices, inflation expectations, and rising Treasury yields to the conflict in Iran. In his assessment, the situation is unlikely to change without a noticeable easing of inflation or a lasting resolution of this conflict.
At the same time, Freddie Mac, a government-sponsored enterprise, reported a lower figure: the average rate on a 30-year fixed mortgage was 6.76%. Its estimate is based on mortgage loan applications submitted to Freddie Mac, which packages and resells loans on the secondary market.
National Association of Realtors economist Lawrence Yun said high mortgage rates are associated with a moderate decline in buyer activity. The association reported a drop in home sales in August, although more sellers were listing properties for sale. Pantheon Macroeconomics economist Oliver Allen also noted that mortgage applications for home purchases remain weak.
