They are at their highest levels in over 16 years.
US mortgage rates advanced to a fresh 16-year high of 6.81%, extending a rapid ascent in borrowing costs that’s seen dealing a bigger blow to the housing market.
The contract rate on a 30-year fixed mortgage rose 6 basis points in the first week of October, marking an eighth-straight increase, according to Mortgage Bankers Association data released Wednesday. That pushed down a gauge of applications to purchase or refinance a home by 2%, the eighth drop in nine weeks, to the lowest level since 1997.
Mortgage rates have soared nearly 1.4 percentage points since the end of July as Treasury yields rise in response to the Federal Reserve’s intensified inflation fight.
The yield on the 10-year Treasury note has continued to rise this week, suggesting mortgage rates will follow.
The MBA’s effective 30-year fixed rate, which includes the effects of compounding, rose to 7.09% in the period ended Oct. 7, also the highest since 2006.
MBA’s index of applications to purchase a home dropped 2.1% to 170.5, the lowest level since 2015, while the gauge of refinancing dropped 1.8% to a fresh 22-year low.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data covers more than 75% of all retail residential mortgage applications in the US.