The strength of the U.S. economy has pushed mortgage rates beyond the 7% mark, with recent data showing a significant increase compared to the same period last year. Freddie Mac, the federally backed mortgage giant, reported on Thursday that the average 30-year fixed-rate mortgage stood at 7.18%, a rise of 6 basis points from the previous week.
In contrast, the average rate for a 15-year mortgage was slightly lower, at 6.51%, down from 6.52% in the preceding week. This rate was substantially higher than the 5.21% recorded a year ago. The current rates are compiled using thousands of applications submitted by lenders from across the nation when borrowers apply for mortgages.
Separate data released by Mortgage News Daily indicated that as of Thursday afternoon, the average 30-year fixed-rate mortgage was slightly higher at 7.22%. The data suggests that inflation and economic strength are contributing factors to these elevated mortgage rates.
Economists have been closely monitoring these figures due to their potential impact on forthcoming decisions by the Federal Reserve. The sustained high rates are reportedly dampening borrower demand, with mortgage applications in the first full week of September falling to levels not seen since 1996.
Despite these high rates, potential homebuyers are being advised to shop around for the best rate quote to maximize their benefits. The Mortgage Bankers Association (MBA) anticipates that by year-end, the 30-year rate could be closer to 6%.
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