Home Business Mortgage rates continue to rise, reaching 6.29% last week.

Mortgage rates continue to rise, reaching 6.29% last week.

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Numbers: U.S. mortgage rates continue to rise, adding hundreds of dollars in costs to potential homeowners.

The Federal Reserve followed suit by raising mortgage rates increasing interest rates again to combat the worst inflation the economy has faced in 40 years.

As of September 15, 30-year fixed-rate mortgages averaged 6.29%. data released by Freddie Mac on Thursday.

This is 27 basis points more than the previous week — one basis point equals one hundredth of a percentage point.

A rate hike is bad news for potential buyers as it potentially adds hundreds of dollars to their mortgage payments.

Mortgage rates are now at their highest since 2008, Bob Brooksmith, president and CEO of the Mortgage Bankers Association, said in a statement.

The typical mortgage applicant’s monthly payment is $456 more than in January, he added.

The median price of an existing home in the U.S. fell to $389,500 in August from $403,800 in the previous month, factoring in rising rates and a decline in buyers. This was reported by the National Association of Realtors.

A year ago, the 30-year mortgage rate was 2.88%.

The average 15-year mortgage rate also rose last week to 5.44%.

Adjustable rate mortgages averaged 4.97% compared to the previous week.

“The housing market continues to struggle as mortgage rates rise again this week after the 10-year Treasury yield jumped to its highest level since 2011,” Sam Hutter, chief economist at Freddie Mac, said in a statement.

“Higher rates are driving home prices down and home sales are down,” he added.

The country still faces a shortage of homes for sale. And “many homeowners are simply choosing not to sell at all because they don’t want to face the tough housing market,” Daryl Fairweather, chief economist at Redfin, told MarketWatch.

“And this means that there are fewer houses on the market. So, despite the fact that buyers are retreating, sellers are also retreating,” she added.

Meanwhile, mortgage applications rose in anticipation of further rate hikes last week. Buyers are looking to get in the market before mortgage rates rise even higher.

Ultimately, home prices fall as a result of higher rates, and sellers respond to lower demand.a good thing“, – said the chairman of the Federal Reserve System, Jerome Powell during a press conference on Wednesday when they announced a rate hike.

“Home prices have been rising at an unsustainably fast rate,” Powell said.

“In the longer term, we need supply and demand to be better aligned, so that house prices grow at a reasonable level … and for people to be able to afford homes again,” he added. “The housing market may have to correct to get back to that spot.”

The yield on the 10-year Treasury rose
TMUBMUSD10Y,
3.687%

up 3.6% in Thursday morning trading.

Any thoughts on the housing market? Email MarketWatch reporter Arthi Swaminathan at aarthi@marketwatch.com

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