Mortgage rates continue to rise to 20-year high

(CNN) – The Federal Reserve (Fed) hiked rates again on Wednesday, marking the largest series of Fed rate hikes in over 30 years to curb inflation and slow the economy to a 40-year high Did.

The plan appears to be working in a housing market where historic mortgage rates are beginning to reduce demand.

Mortgage rates are soaring, surpassing 7% for the first time since 2002.

According to lender freddie mac30-year fixed-rate mortgages averaged 7.08% in the week ending Oct. 27.

For reference, a year ago the 30-year fixed rate was 3.14%. Experts say the higher the interest rate, the less you can afford.

“People buy homes based on monthly payments,” said economic analyst Dylan Rattigan.

The rise has spurred a drastic rate hike by the Federal Reserve, which has crushed the housing market as house prices have started to fall in parts of the country and new contracts have slowed, experts say. It is said that

“We’ve seen interest rates rise at a faster pace than we’ve seen since the 1980s,” economist Daniel Altman said. doing.”

The Federal Reserve does not directly set the interest rates borrowers pay on mortgages, but its actions influence them.

Experts say prices could continue to fall in the near future, but with a lot of demand and supply still low, consumers shouldn’t see a big drop anytime soon. prize.

Meanwhile, demand for mortgages has fallen dramatically.according to Mortgage Bankers Associationapplications are at their slowest pace since 1997.

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