US mortgage rates climb to 6.52%, highest since early August
US MORTGAGE rates rose sharply for a second straight week, reaching the highest level since early August while prompting steep declines in both home-purchase and refinance activity.
The contract rate on a 30-year fixed mortgage rose 16 basis points (bps) to 6.52 per cent in the week ended Oct 11, according to Mortgage Bankers Association (MBA) data released on Wednesday (Oct 16).
In the last two weeks, the rate has climbed 38 bps, the most for a comparable period since February 2023.
The 15-year fixed rate jumped 23 bps, the biggest advance since May, to 5.94 per cent.
Mortgage rates – which track US Treasury yields – have been moving up recently, as reports of strong job growth and sticky inflation prompt traders to pare back bets on aggressive interest rate cuts.
Federal Reserve officials who have spoken since those releases have supported a more gradual approach to lowering borrowing costs after September’s outsize cut.
Rising mortgage rates are dashing hopes for a swift recovery in a housing market that has been hamstrung by a combination of high borrowing costs and asking prices.
MBA’s gauge of home purchases slid 7.2 per cent, the most since mid-February, while the refinancing index slumped more than 26 per cent in the largest weekly decline since March 2020.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data covers more than 75 per cent of all retail residential mortgage applications in the US. BLOOMBERG
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