Interest rates

US mortgage interest rates hit highest level since 2008

A view shows newly built homes in Chico, California September 24, 2020. REUTERS/Saif Tawfeeq/File Photo

Join now for FREE unlimited access to Reuters.com

Register

June 15 (Reuters) – The average interest rate on the most popular U.S. home loan hit its highest level since the 2008 financial crisis and purchase orders fell more than 15% from the last year, according to data from the Mortgage Bankers Association (MBA) on Wednesday. .

Still, more homebuyers searched for properties compared to the previous week, possibly signaling a flurry of activity before the Federal Reserve’s aggressive tightening hits the sector further.

Later Wednesday, Fed policymakers are expected to raise interest rates by 75 basis points to rein in inflation to its highest level in more than 40 years. The sharp move, after a worse-than-expected key inflation reading last Friday, would be the biggest U.S. interest rate hike in decades. L1N2Y12O3

Join now for FREE unlimited access to Reuters.com

Register

Expectations of Fed tightening led to a surge in Treasury yields. The yield on the 10-year note serves as a benchmark for mortgage rates.

The average contract rate for a 30-year fixed-rate mortgage rose 25 basis points to 5.65% for the week ended June 10, the highest level since late 2008, towards the end of the crisis finance and the Great Recession.

The MBA said its composite purchase index, a measure of all mortgage applications for the purchase of a single-family home, rose 8.1% from the previous week and its refinancing index increased by 3.7%.

But purchase inquiries were down more than 15% from a year ago as record high housing stock and lack of affordability, alongside rising interest rates, took a toll. impact on demand.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Lindsay Dunsmuir; Editing by Simon Cameron-Moore

Our standards: The Thomson Reuters Trust Principles.