US mortgage rates at highest level since November 2023
Mortgage interest rates in the US have reached their highest level in recent years under the impact of energy costs and inflation.
The 30-year fixed mortgage contract rate in the US increased by 19 basis points at the beginning of October to 7.49 percent, recording the highest level seen since the November 2023 period.
Rapid Increase in Interest Rates
According to data released by the Mortgage Bankers Association (MBA), the 30-year fixed mortgage contract rate increased by 19 basis points in the week ending October 2 to reach 7.49 percent.
The Three-Week Picture
While an increase of nearly half a point was recorded over the past three weeks, this figure pointed to the fastest upward trend seen since the beginning of 2023.
Bond Yields and Inflation
Since the start of the Iran war, energy costs and general inflation have risen, increasing the yields on 10-year Treasury bonds, which largely influence mortgage interest rates. Yields reached their highest level since 2002 on Monday.
Impact on Housing Sales
Along with prices that still remain at high levels, mortgage interest rates have also prevented both existing home sales and new home sales from gaining momentum.
Decline in Loan Applications
The MBA purchase index, which measures loan applications, fell by 2.1 percent to its lowest level in over a year. Meanwhile, the MBA's refinancing indicator dropped by 7.5 percent, continuing the downward trend that began in mid-August.
Scope of the Survey
Conducted weekly since 1990, the MBA survey is based on responses from mortgage bankers, commercial banks, and thrifts. The data covers more than 75 percent of all retail residential mortgage applications in the US.