The numbers: Mortgage rates rose above 6% this week for the first time since late 2008.
The increase in mortgage rates comes amid rising inflation, and with the prospect of the Federal Reserve likely to be more aggressive with its rate hikes to slow consumer price growth.
The 30-year fixed-rate mortgage averaged 6.02% as of September 15, according to data released by Freddie Mac on Thursday.
That was up 13 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%.
The rise in rates is bad news for prospective home buyers, as it potentially adds hundreds of dollars to their monthly mortgage payments.
The median price of an existing home in the U.S. was $403,800, as of July, the National Association of Realtors said.
A year ago, the 30-year mortgage rate was at 2.86%.
The average rate on the 15-year mortgage also rose over the past week to 5.21%.
The rate on adjustable-rate mortgages averaged 4.93%, up from the prior week.
“Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“This indicates that while home price declines will likely continue, they should not be large,” he added.
Mortgage applications continue to fall as rates hit 6%.
Higher rates, high home prices, and recession fears are all compelling buyers to wait it out.
The drop in demand is also pushing home sellers to wait, because they’re having to drop prices to attract offers. The number of for-sale listings have dropped, Redfin said in a recent report.
“I expect fall and winter to be especially frigid,” Daryl Fairweather, chief economist at Redfin, said, “as sales dry up more than usual.”
The yield on the 10-year Treasury note
rose above 3.4% in morning trading on Thursday.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at email@example.com