The interest rate on the most popular U.S. mortgages reached its highest level since September 2000 last week, its seventh consecutive weekly increase, while demand for mortgages reached a 28-year low, according to a survey carried out on Wednesday.
The average contract rate reached 7.9% for a 30-year fixed-rate mortgage during the week ended Oct. 20, up 20 basis points from the previous week, the Mortgage Bankers Association said (MBA).
“Mortgage activity continued to stagnate, with demand hitting its lowest weekly level since 1995,” notes Joel Kan, MBA vice president and deputy chief economist. “These higher mortgage rates are keeping potential buyers out of the market and continuing to dampen refinancing activity.
The cost of borrowing to buy a home rose even as the Federal Reserve paused rate hikes in September, after raising its benchmark rate from near zero in March 2022 to 5.25 -5.50% in July this year.
Since July, the 30-year fixed-rate mortgage has risen 81 basis points, in tandem with a similar rise in the yield on the 10-year Treasury note, the main benchmark for long-term U.S. borrowing.
(Written by Ann Saphir, Corentin Chappron, edited by Kate Entringer)
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