“The housing market may have to go through a correction,” Freddy Mac says: Mortgage rates were 6.29%

Numbers: Mortgage rates in the US continue to rise, adding hundreds of dollars in costs to potential homeowners.

The increase in mortgage rates followed the Federal Reserve raise interest rates Once again to tackle the worst inflation the economy has faced in 40 years.

The average 30-year mortgage was 6.29% as of September 15, according to data Released by Freddy Mac on Thursday.

That’s 27 basis points higher than the previous week – one basis point equals one hundred percentage points.

Higher interest rates are bad news for potential buyers, as they will likely add hundreds of dollars to their mortgage payments.

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

He added that the typical mortgage applicant’s monthly payment is $456 more than in January.

As prices rise and buyers fall back, the median current home price in the US fell to $389,500 in August from $403,800 the previous month, The National Association of Realtors said.

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

The average 15-year mortgage rate also rose over the past week to 5.44%.

The average adjustable rate mortgage was 4.97%, compared to the previous week.

“The housing market continues to face headwinds with mortgage rates increasing again this week, after the 10-year Treasury yield jumped to its highest level since 2011,” Sam Khater, chief economist at Freddy Mac, said in a statement.

“Affected by higher rates, house prices are falling, and home sales are down,” he added.

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

This means that there are fewer homes on the market. So even though the buyers are pulling back, the sellers are also pulling back.”

Meanwhile, mortgage applications rose in anticipation of the interest rate hike last week. Buyers are keen to get into the market before mortgage rates go up in March.

Ultimately, housing prices fall as a result of higher prices and sellers react to lower demandGood thingFederal Reserve Chairman Jerome Powell said, During a press conference on Wednesday, When they announced the price hike.

“House prices have been rising at an unsustainable rapid level,” Powell said.

He added, “In the long term, what we need is for supply and demand to align better, so that housing prices rise at a reasonable level… and people can buy homes again.” “The housing market may have to go through a correction to get back to that place.”

The yield on the 10-year treasury bond TMUBMUSD10Y rose,
3.714%
Above 3.6% in morning trading on Thursday.

Do you have ideas about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]

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