Mortgage rates just climbed to their highest level since 2002, according to data released Thursday, as homebuyers grapple with exorbitant interest payments amid the Federal Reserve’s most aggressive monetary policy in years.
A house is for sale in Arlington, Virginia.
The average 30-year mixed mortgage rate was 7.09% during the seven-day period ending Thursday, according to weekly data released by mortgage provider Freddie Mac.
Interest payments are now more than twice as steep as they were at the beginning of last year, when 30-year mortgage rates hovered at 3% just before the Fed’s tightening cycle kicked off.
Potentially more troublesome for the broader economy is the difference between average mortgage rates and government-issued bonds: Moody’s Analytics economist Cris deRitis told MarketWatch the 277-basis-point spread between 10-year Treasury note yields and 30-year average mortgage rates is “highly unusual” and typically only observed “during periods of financial crisis such as the Great Recession or the early 1980s recession.”
Other than the high borrowing costs, perhaps more troublesome for the broader economy is the difference between average mortgage rates and government-issued bonds.
This is a breaking news story and will be updated…