Current:Home > Contact-usThe average long-term US mortgage rate surges to 7.49%, its highest level since December 2000-Angel Dreamer Wealth Society D1 Reviews & Insights
The average long-term US mortgage rate surges to 7.49%, its highest level since December 2000
View Date:2024-12-23 16:35:57
LOS ANGELES (AP) — The cost of financing a home surged again this week as the average long-term U.S. mortgage rate climbed to its highest level since December 2000, further dimming the affordability outlook for many would-be homebuyers.
The average rate on the benchmark 30-year home loan rose to 7.49% from 7.31% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.66%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, also increased. The average rate rose to 6.78% from 6.72% last week. A year ago, it averaged 5.90%, Freddie Mac said.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in rock-bottom rates two years ago from selling. The average rate on a 30-year mortgage is now more than double what it was two years ago, when it was just 2.99%.
The combination of elevated rates and low home inventory has worsened the affordability crunch by keeping home prices near all-time highs even as sales of previously occupied U.S. homes have fallen 21% through the first eight months of this year versus the same stretch in 2022.
Home loan applications fell to the lowest level since 1995 last week, according to the Mortgage Bankers Association.
“Several factors, including shifts in inflation, the job market and uncertainty around the Federal Reserve’s next move, are contributing to the highest mortgage rates in a generation,” said Sam Khater, Freddie Mac’s chief economist. “Unsurprisingly, this is pulling back homebuyer demand.”
This is the fourth consecutive week that mortgage rates have moved higher. The weekly average rate on a 30-year mortgage has remained above 7% since mid-August and is now at the highest level since Dec. 8, 2000, when it averaged 7.57%.
Mortgage rates have been climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield has surged in recent weeks amid worries that the Federal Reserve is likely to keep its main interest rate at a high level for a long time in its bid to lower inflation.
The central bank has already pulled its main interest rate to the highest level since 2001 in hopes of extinguishing high inflation, and it indicated last month it may cut rates by less next year than earlier expected.
The threat of higher rates for longer has pushed Treasury yields to heights unseen in more than a decade. On Tuesday, the yield on the 10-year Treasury jumped to 4.80%, its highest level since 2007. It has since eased back and was at 4.71% in midday trading Thursday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.
While mortgage rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
veryGood! (6)
Related
- Celtics' Jaylen Brown calls Bucks' Giannis Antetokounmpo a 'child' over fake handshake
- Dozens of Countries Take Aim at Climate Super Pollutants
- Donald Trump indicted in documents probe. Here's what we know so far.
- How Abortion Bans—Even With Medical Emergency Exemptions—Impact Healthcare
- All the Ways Megan Fox Hinted at Her Pregnancy With Machine Gun Kelly
- Warren Buffett Faces Pressure to Invest for the Climate, Not Just for Profit
- California voters enshrine right to abortion and contraception in state constitution
- Carrying out executions took a secret toll on workers — then changed their politics
- Firefighters make progress, but Southern California wildfire rages on
- UN Climate Summit: Small Countries Step Up While Major Emitters Are Silent, and a Teen Takes World Leaders to Task
Ranking
- Man jailed after Tuskegee University shooting says he fired his gun, but denies shooting at anyone
- Kim Kardashian’s SKIMS Wedding Shop Has You Covered for the Big Day and Beyond
- Today’s Climate: August 14-15, 2010
- Mama June Shannon Reveals She Spent $1 Million on Drugs Amid Addiction
- Texas mother sentenced to 50 years for leaving kids in dire conditions as son’s body decomposed
- Kate Spade 24-Hour Flash Deal: Get This $360 Tote Bag for Just $79
- Who is Walt Nauta — and why was the Trump aide also indicted in the documents case?
- As Amazon Fires Burn, Pope Convenes Meeting on the Rainforests and Moral Obligation to Protect Them
Recommendation
-
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Something Corporate
-
Why Pat Sajak's Daughter Maggie Is Stepping in for Vanna White on Wheel of Fortune
-
Trump Strips California’s Right to Set Tougher Auto Standards
-
Feds Pour Millions into Innovative Energy Storage Projects in New York
-
Man found dead in tanning bed at Indianapolis Planet Fitness; family wants stricter policies
-
Protesters Call for a Halt to Three Massachusetts Pipeline Projects
-
In California, Study Finds Drilling and Fracking into Freshwater Formations
-
NYC Mayor Adams faces backlash for move to involuntarily hospitalize homeless people