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During the week ending 24 June, the average U.S. interest rate for a 30-year, fixed-rate mortgage reached 5.81 percent, another in a series of 13-year high marks.
The rate was the highest since November 2008, The Wall Street Journal said.
The rate moved up from 5.78 percent the week ending 17 June and 5.23 percent the week before that, according to the Federal Home Loan Mortgage Corp.
That week-to-week leap of 55 basis points was the steepest since 1984, the WSJ noted.
Rates are rising in the aftermath of the U.S. Federal Reserve’s half-point interest rate hike earlier this month.
The higher rate has made mortgages more expensive but has done nothing to soften home prices. The average selling price of a U.S. home in May topped $400,000, according to the National Association of Realtors.
Some lenders are now quoting rates above 6 percent, the WSJ noted.
TREND FORECAST: We predicted that the housing market would see a dramatic downturn when the U.S. Federal Reserve raised its base interest rate to or past 1.5 percent.
The turn began after the Fed hiked rates in March, as we reported in “Pace of Existing April Home Sales Slowest in Two Years” (24 May 2022).
This month’s additional rate boost has lofted rates to our target level. What has been a red-hot U.S. housing market will now enter a clear decline from the record prices that have dominated the past two years.
However, the shortage of homes and of land on which to build them will—minus a wild card such as escalating war with Russia and/or war in the Middle East with Israel and its U.S. allies against Iran—put a floor under prices, which will not return to pre-COVID levels.