US Mortgage Rates Soar To 2007 Levels Above 6.7%

US Mortgage Rates Soar To 2007 Levels Above 6.7%

Mortgage rates surged to the highest level since 2007, with higher borrowing costs getting even tighter on the quickly cooling US housing market.

The average for a 30-year fixed loan was 6.7%, up from 6.29% last week. Rates tracked a surge in 10-year Treasury yields, which approached 4% earlier this week.

The US pending home sales dropped for the seventh time this year in August extending the housing market's downturn.

The National Association of Realtors index of contract signings to purchase previously owned homes decreased 2% last month to 88.4, the lowest since 2011, excluding the immediate aftermath of the pandemic -- according to data released Wednesday.

New US home construction rose unexpectedly in August, though the slowest pace of building permits in more than two years underscores how higher mortgage rates are weighing on demand.

Residential starts increased 12.2% last month to a 1.58 million annualized rate, led by a jump in multifamily projects, according to government data released Tuesday. The pace of starts topped all estimates in a Bloomberg survey of economists. Applications to build, a proxy for future construction, declined to an annualized 1.52 million units, the fewest since June 2020.

Remember that the Federal Reserve said they would continue to tame inflation by raising interest rates, as much as they need to, and will continue to hike rates for the next few months which will just make these data even worse than they are.

Resource: Bloomberg