After the Fed rate hike, mortgage rates jumped even higher

This was the highest mortgage interest rate since 2008 and is further evidence that the decade-long period of low interest rates since the Great Depression is over. The Federal Reserve is taking aggressive action to curb inflation, and today’s successive three-quarter percentage-point rate hike is likely to create long-term upward pressure on mortgage rates.

“There is uncertainty about the Fed’s next move, and ‘interest rate volatility is high,'” said Mike Frattantoni, chief economist at Treasury, especially the Mortgage Bankers Association.

The Fed does not directly control fixed mortgage rates. The most appropriate measure is the yield on 10-year Treasury bonds, which has rebounded in recent weeks.

The average interest rate on 15-year fixed-rate loans rose 0.23 percentage points to 5.44%, while variable-rate 5/1 mortgages rose 0.04 percentage points to 4.97.

Still, activity is well below last year’s level. Purchase applications are down 30% year-over-year, while refinance activity is down 83%.

Last week, refinancing accounted for more than 32% of mortgage applications. Meanwhile, the share of adjustable-rate mortgages remained steady at 9% of total applications.

You can see where mortgage rates are headed.

Housing economists see interest rates rising as the Fed expresses its position, but the question is by how much.

Economists expected interest rates to rise by the end of 2022, but not as fast as they have been since the Fed began fighting inflation in earnest. Competition among homebuyers could weaken further as mortgage rates surpass the 6 percent bar, but rising interest rates also reduce the level they can afford. According to the U.S. Department of Housing and Urban Development, the national median household income in 2022 was $90,000, and the average price of existing homes sold in August was $389,500. Based on a down payment of 20 percent and a mortgage rate of 6.35 percent, $1,939 per month represents 26 percent of the average household’s monthly income.

A year ago, the average household income was $79,900, the average home price was $364,600, and the average mortgage rate was only 3.03%. Only 19 percent of a family’s monthly income was needed to buy a conventional home.

September 27, 2022 – The average interest rate on a foreign-currency mortgage.

Interest rates on secured loans rose across all loan categories. Borrowers interested in a 30-year fixed-rate mortgage will get an average interest-free rate of 7.619 percent, up 0.133 percentage points from yesterday.

• The last interest rate on a 30-year fixed-rate mortgage is 7.619%.
• The last interest rate on a 15-year fixed-rate mortgage is 6.648%.
• The last 5/6 ARM rate is 6.471%.
• The last 7/6 ARM rate is 7.193%.
• The latest 10/6 ARM rate is 7.192%.

How are mortgage rates affecting home sales?

In the week to Sept. 16, the total number of mortgage applications increased 3.8% and most of the transactions are in the financial sector. This is the first time applications have increased on a weekly basis in more than a month.

Should I freeze my mortgage interest rate today?

Locking in interest rates once you have an approved offer on your home can help ensure competitive interest rates and proper monthly payments on your home mortgage. Interest rate lock means guaranteeing a fixed interest rate for 45-60 days, usually regardless of the average rate. Setting a competitive interest rate can protect borrowers from higher interest rates before their mortgage closes.

It may be tempting to wait to see if interest rates drop lower before you get a fixed rate on your mortgage, but that may not be necessary. Ask the borrower about the “real estate price” option, which allows you to get a lower interest rate if the market changes during a lockout. They usually cost a few hundred dollars.