Average long-term US mortgage rate climbs to 7.09% this week to highest level in more than 20 years
By ALEX VEIGA and MATT OTT, AP Business Writers
The average long-term U.S. mortgage rate climbed this week to its highest level in more than 20 years, grim news for would-be homebuyers already challenged by a housing market that remains competitive due to a dearth of homes for sale.
Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 7.09% from 6.96% last week. A year ago, the rate averaged 5.13%.
It’s the fourth consecutive weekly increase for the average rate and the highest since early April 2002, when it averaged 7.13%. The last time the average rate was above 7% was last November, when it stood at 7.08%.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans.
“With prices even higher than they were a year ago in many markets, crossing the 7% mortgage rate threshold again could be what sets in motion a major contraction in the housing market this fall,” said Lisa Sturtevant, chief economist for Bright MLS.