U.S. mortgage interest rates above 6% for first time since 2008

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U.S. mortgage interest rates overview: 

• Who: Mortgage Bankers Association data shows the average interest rate for the most favored home loan in the U.S. has risen above 6% for the first time since 2008. 
• Why: Data shows that the average interest rate rate has more than doubled from where it was at a year ago. 
• Where: Nationwide.

The most popular U.S. home loan now has an average interest rate of more than 6%, the first time the number has been breached since 2008. 

The average interest rate amount has also more than doubled from what it was at this time a year ago, according to data from the Mortgage Bankers Association (MBA), reports Reuters. 

The rise in interest rates is occurring at the same time the Federal Reserve continues to aggressively increase borrowing costs as part of its efforts to dull high inflation. 

The Federal Reserve’s benchmark overnight lending rate has increased by 225 basis points since March, reports Reuters. 

Treasury yields have risen on account of expectations that the central bank would be tightening, with the 10-year notes acting as a mortgage rate benchmark. 

The average 30-year fixed-rate mortgage contract rate, meanwhile, increased by a total of 7 basis points to hit 6.01% for the week ending on Sept. 9—a level that has not been seen since the end of the Great Recession and financial crisis, reports Reuters. 

Data from the MBA also shows that its Market Composite Index—which measures the volume of mortgage loan applications—is declining and is down a total of 64% from this time last year. 

MBA’s Refinance Index is down 83.3% from year ago, and still dropping

The MBA’s Refinance Index—which is reportedly down 83.3% from this time a year ago—has also fallen 4.2% from the week prior, reports Reuters. 

It is being expected that the Federal Reserve will have no choice but to deliver a 75-basis point interest rate hike for the third straight time, following a key inflation reading that was worse than expected earlier this month. 

Investors have now largely begun predicting that the Fed will be forced to hike rates more quickly and more severely than what had previously been imagined, reports Reuters. 

The sale of new homes reportedly dipped to a more-than-6-year low in July—due to the higher interest rates—while single family housing starts and home resales are at their lowest rates in two years, reports Reuters. 

A class action lawsuit was filed against Wintrust Financial Corporation and its subsidiary Barrington Bank & Trust Co. in May over claims the lenders systematically discriminated against prospective mortgage loan borrowers who ar Black and/or African American. 

Have you felt the effects of rising interest rates? Let us know in the comments! 

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