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This Week, the Average Long-term Mortgage Rate in the Us Rose Above 7%
Two weeks ago, when rates crossed the 7% threshold for the first time since 2002, the average long-term mortgage rate in the United States rose to 20-year highs. According to a report released by mortgage buyer Freddie Mac on Thursday, the benchmark 30-year rate increased to 7.08% from 6.95% the previous week. The average rate was 2.98% a year ago.
The rate for a 15-year mortgage, which is popular among homeowners refinancing, increased from 6.29% last week to 6.38% this week. 2.27% was the value a year ago. As part of its aim to combat inflation, the Federal Reserve increased its short-term lending rate by 0.75 percentage points more last week, three times the average increase. Its key rate is currently between 3.75% and 4%.
There will probably be further rise, but there is some optimism that the Fed will reduce them as more proof that prices have peaked emerges. Nearly ten years after 26 people died, the Sandy Hook monument opens
Consumer inflation hit 7.7% in October compared to a year earlier, the lowest increase year over year since January, according to Labor Department data released on Thursday. “
Core” inflation, which excludes volatile food and energy prices, increased 6.3% over the previous 12 months. All of the figures came in below what economists had predicted. Stock prices rose immediately after the release of Thursday’s report because it suggested that the Fed would decide to delay raising interest rates.
The average long-term mortgage rate in the United States recently surpassed 7% for the first time in more than two decades, which along with sky-high property prices has severely weakened the spending power of homebuyers by driving up monthly mortgage payments by hundreds of dollars.
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Since financing prices have become too high for many Americans, who already spend more for food, petrol, and other necessities, existing home sales have been declining for eight straight months. Because they don’t want to lock in a higher rate on their subsequent mortgage, many homeowners who wish to upgrade or move have postponed listing their properties.
Real estate firms have reduced their workforces and lowered their financial projections as a result of the weak housing market. Redfin, an online real estate brokerage, announced on Wednesday that it will be laying off 862 people and closing its immediate cash offer subsidiary.
In June, Redfin also let go of 470 staff, blaming a slowdown in home sales. Redfin said in a regulatory filing that it had reduced its employment by more than a quarter through attrition and layoffs on the grounds that the housing slowdown will continue “at least into 2023.”
Compass, a different online real estate agency, has fired hundreds of employees this year. Mortgage rates often follow the yield on the 10-year Treasury note, albeit they don’t always reflect Fed rate increases. The yield is affected by a number of variables, such as investor expectations for future inflation and the demand for U.S. Treasury bonds internationally.