Average long-term US mortgage rate surges to highest level since December 2000
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
LOS ANGELES — 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. At the same time, the median monthly payment listed on home loan applications has been rising. It was $2,170 in August, up 18% from a year earlier.
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