Mortgage rates in the US continue to rise: demand for loans hits 28-year low

Mortgage rates in the US continue to rise: demand for loans hits 28-year low

According to a report from finanzmarktwelt.de, mortgage interest rates in the USA have continued to rise and have reached a new high. According to the portal Bankrate.com, the average US mortgage interest rate for a term of 30 years is 8.04%, an increase of 0.05 percentage points compared to the previous week. The American Association of Mortgage Bankers Mortgage Bankers Association (MBA) reports an increase in mortgage rates to 7.9%, a weekly increase of 0.20 percentage points. This is the seventh consecutive weekly increase.

Rising mortgage rates are already having an impact on the U.S. real estate market. Demand for loans for home purchases has fallen to its lowest level since 1995, according to an MBA index. The rising cost of home loans is limiting affordability, leading to a decline in demand. The effective interest rate on mortgages has exceeded 8% for the first time in 23 years. The adjustable mortgage rate has risen to nearly 7%, the highest since early June. Ryan Marshall, CEO of PulteGroup Inc., said higher mortgage rates have further worsened affordability for some buyers.

The rising mortgage rates are due to the rise in government bond yields. With the 10-year yield rising above 5% this week for the first time in 16 years, home borrowing costs are expected to continue rising in the coming weeks. Since the first week of April, interest rates on 30-year fixed-rate mortgages have increased by more than 1.5 percentage points. A significant reduction in borrowing costs is needed to improve affordability for potential buyers, which is currently at a record low.

Overall, demand for real estate loans has decreased while prices remain high due to limited supply. The overall application index, which includes purchases and refinances, also fell to its lowest level since 1995. Refinancing activities, however, have increased slightly.

The development of mortgage interest rates in the USA is of great importance for the local economy, especially for the real estate market. Although interest rates are rising, the US economy still appears to be robust. However, it remains to be seen how the development of mortgage interest rates will continue to affect the real estate market and the economy.

Source: According to a report from finanzmarktwelt.de