{"id":2065913,"date":"2023-10-13T05:24:04","date_gmt":"2023-10-13T09:24:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability\/"},"modified":"2023-10-13T05:29:22","modified_gmt":"2023-10-13T09:29:22","slug":"mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability\/","title":{"rendered":"Mortgage rates hit 23-year high, hurting homebuyer affordability."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fmortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2065913&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>Homebuyer Purchasing Power\u2064 Takes a Hit as\u200c Mortgage Rates Soar to 23-Year High<\/h2>\n<p>Homebuyer purchasing power has taken yet another hit as home loan borrowing costs\u2063 have\u200b risen for the fifth \u2062straight week, soaring to \u200ctheir highest level \u2062in 23 \u200cyears.<\/p>\n<p>The\u2062 average rate on the \u2062benchmark 30-year mortgage has risen to 7.57 percent, up from 7.49 percent last week, according to Freddie Mac.<\/p>\n<p>That&#8217;s more than double what\u2062 it was two years \u200bago and the highest \u2062level since Dec. 1, 2000, when the 30-year mortgage rate averaged 7.65 percent.<\/p>\n<\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/real-estate\/mortgage-applications-drop-to-30-year-low-amid-elevated-interest-rate-5506684?ea_src=author_manual&#038;ea_med=related_stories\">Mortgage Applications Drop to\u2063 30-Year Low Amid Elevated Interest Rate<\/a><\/h3>\n<p class=\"text-comp-caption\">10\/9\/2023<\/p>\n<\/li>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/world\/homeowners-brace-for-mortgage-payment-shock-amid-higher-for-longer-rate-outlook-5502146?ea_src=author_manual&#038;ea_med=related_stories\">Homeowners Brace for\u2062 Mortgage Payment Shock Amid Higher for\u2064 Longer Rate Outlook<\/a><\/h3>\n<p class=\"text-comp-caption\">10\/2\/2023<\/p>\n<\/li>\n<\/ul>\n<p>\u201cFor the fifth consecutive week, mortgage rates rose as ongoing\u2062 market and geopolitical uncertainty continues to increase,\u201d Sam Khater, Freddie Mac\u2019s\u200d chief economist, said in a statement.<\/p>\n<p>\u201cThe\u200d good news \u2062is that the economy and \u200cincomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability \u2064constraints.\u2062 As a result, purchase demand remains at a three-decade\u200b low,\u201d\u200d he added.<\/p>\n<p>With home loan borrowing costs at \u200cmulti-decade highs and many potential home sellers having locked in their \u2063mortgages at \u2063much lower rates, there are dual disincentives pushing down sales volumes.<\/p>\n<p>&#8220;No\u200d one wants to sell their property, no one wants to buy a property,&#8221; Glenn Kelman, CEO of housing data provider Redfin, told Yahoo Finance in an interview. &#8220;So sales volume is going\u200c to stay low for the foreseeable future.&#8221;<\/p>\n<h2>Mortgage Applications Near \u2063Multi-Decade Lows<\/h2>\n<p>Meanwhile, applications for home loans have\u2063 dropped to near multi-decade lows, according \u2064to the Mortgage Bankers Association (MBA).<\/p>\n<p>\u201cApplication activity remains depressed and close \u200cto \u2062multi-decade lows, with purchase applications still almost 20 percent behind \u200blast year\u2019s pace,&#8221; MBA deputy chief economist Joel Kan said in a statement.<\/p>\n<p>&#8220;Refinance applications also continue to be limited, and the average loan size has fallen\u2063 to its \u2062lowest \u2064level since 2017,\u201d \u2064he added.<\/p>\n<p>Mortgage rates\u200c are \u200bclosely \u200ctied to the 10-year Treasury note yield, which in recent months has \u2062been on a tear.<\/p>\n<p>Since late July, the yield\u200d on the benchmark 10-year note jumped from about 4 percent to\u200b about 4.8 percent\u2014a 16-year high.<\/p>\n<p>Part of what&#8217;s driving\u200d Treasury yields\u2014and mortgage rates\u2014higher is the Federal Reserve&#8217;s series of\u2062 sharp rate hikes.<\/p>\n<h2>Housing Lobby Groups Plead for Rate Hike Pause<\/h2>\n<p>Several housing-industry lobby groups\u200d have urged Federal Reserve Chair Jerome Powell not to raise interest rates any further\u2014and to refrain from selling mortgage bonds unless real estate financing becomes more stable.<\/p>\n<p>\u201cWe urge the Fed to take \u2062these simple steps \u2064to ensure that this sector does not\u2062 precipitate\u2063 the hard \u2063landing the Fed has tried so hard to avoid,\u201d the National Association\u200b of Realtors, Mortgage Bankers Association, and National Association of Home Builders wrote in a letter to Mr. \u200dPowell on\u200c Oct. 9.<\/p>\n<p>The three groups said that continued\u2062 market uncertainty about where the Fed goes from\u2062 here in terms of interest rates \u200dis leading to\u200b a widening premium of 30-year mortgage rates over \u2063benchmark 10-year \u2062Treasury yields.<\/p>\n<p>With this\u200d spread now having\u2063 reached \u2064\u201chistorically high levels,\u201d the trio said that housing affordability has taken a hit, causing &#8220;additional disruptions for a real estate market that \u200bis already straining to adjust to a dramatic pullback in both\u2063 mortgage origination and home sale volume.\u201d<\/p>\n<h2>Inflation\u200b in Focus<\/h2>\n<p>The government released the latest data\u2064 on inflation on Thursday, showing that the\u200b Consumer Price Index (CPI) rose 3.7 percent in \u2062September, matching August&#8217;s pace.<\/p>\n<p>While that&#8217;s down from a recent peak of 9.1 \u2064percent in \u2063June 2022 and lower than the 8.2 percent pace a year ago, it&#8217;s \u200cstill well above the Fed&#8217;s inflation target of 2 percent.<\/p>\n<p>&#8220;Consumer prices are not fully compliant, though they have decelerated from last year,&#8221; said Lawrence Yun, chief economist for the National Association of Realtors, in a\u200d statement.<\/p>\n<p>Mr. Yun pointed out that despite some\u2063 signs \u200cpointing toward \u2062softer rent growth, the latest government figures are still showing a &#8220;fast increase.&#8221;<\/p>\n<p>&#8220;Rents rose 7.4 \u200cpercent from \u200ba year ago,&#8221; he said. &#8220;This is the main reason why consumer \u2063prices are not fully under control and why the Fed refuses to consider cutting interest rates.&#8221;<\/p>\n<p>Housing data\u2064 provider Redfin said in a post on X that it&#8217;s \u2064observed a flattening of asking rents in\u200c September.<\/p>\n<p>&#8220;Rent price growth \u200chas flattened\u2064 because a boom in new rental\u2063 units have flooded the \u200bmarket,&#8221; the group said in\u200c the post. &#8220;Prices haven\u2019t substantially declined because there\u2019s still demand for rentals, especially as <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability\/\" title=\"Mortgage rates hit 23-year high, hurting homebuyer affordability.\">elevated\u200d mortgage rates deter \u200chomebuyers<\/a>.&#8221;<\/p>\n<p>In his\u2064 statement, Mr. Yun added that he believes it&#8217;s &#8220;inevitable&#8221; for rent\u2063 price growth to slow down\u200d in the future\u200d because of \u200bexpanded construction of \u2062new apartment buildings.<\/p>\n<h2>Where Do Rates Go From \u2064Here?<\/h2>\n<p>Messages have been mixed from Fed policymakers about where the central bank&#8217;s <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/former-fed-nominee-judy-shelton-says-fed-can-only-kill-the-economy-with-whatever-it-takes-approach\/\" title=\"Former Fed Nominee Judy Shelton Says Fed Can \u201cOnly Kill the Economy\u201d With \u201cWhatever It Takes\u201d Approach\">benchmark fed funds rate<\/a> \u2062goes from here.<\/p>\n<p>Several central bank officials have suggested in recent days that the Fed may not raise its benchmark\u2063 rate any further than the current 22-year high\u2014while others see more upside for rates.<\/p>\n<p>While the Fed opted not to\u2063 raise the benchmark \u2062federal funds rate at its\u2064 most recent policy\u200c meeting in September, rates are\u2063 at the highest level since 2001, within a range of 5.25\u20135.5 percent.<\/p>\n<p>Newly released\u2064 records of discussions among \u200dFederal Reserve policymakers show that they expect one more interest rate hike and then they&#8217;ll hold rates high for &#8220;some time,&#8221; although a recent surge in long-term Treasury yields\u200b may have changed that calculus.<\/p>\n<p>Minutes from the central bank&#8217;s most recent September meeting of the rate-setting Federal\u2062 Open \u200bMarket Committee (FOMC), released on\u200c Oct. 11, \u2062show that a &#8220;majority&#8221; of officials believe that one more rate hike &#8220;would likely be appropriate&#8221; to get inflation closer to the Fed&#8217;s 2 percent \u200btarget.<\/p>\n<p>By contrast, &#8220;some&#8221; policymakers &#8220;judged it \u2063likely that no \u200dfurther increases\u200d would be warranted,&#8221; the minutes \u2062read. This is a view that aligns \u200cclosely with market \u200dexpectations that put the odds of another pause at the FOMC&#8217;s next meeting in November at more than 90 percent.<\/p>\n<p>Before the \u2062release of the minutes, a recent surge in longer dated U.S. Treasurys\u2014which made \u2063government borrowing more expensive\u2014prompted several Fed officials to suggest that the central bank may leave rates unchanged in \u2064November.<\/p>\n<p>Federal Reserve Governor Michelle Bowman said \u200dlast \u2064week that\u200c despite &#8220;some progress&#8221; \u200bon inflation,\u2063 the\u200c Fed will probably need to tighten monetary policy further to bring inflation down to target and restore\u2062 price stability.<\/p>\n<p>By contrast, several other \u2063Federal Reserve officials have \u2064suggested that the central bank may\u200c leave rates unchanged at the FOMC&#8217;s next meeting in roughly three weeks&#8217; time.<\/p>\n<p>Philip Jefferson, \u2062vice chair of the Fed&#8217;s board, said in an Oct. 9 speech to the\u2064 National Association for Business Economics that he would \u201cremain\u200c cognizant\u201d of recent spikes in U.S. Treasury yields and \u201ckeep \u2062that in mind as I assess the \u200bfuture path \u2064of policy.\u201d<\/p>\n<p>Lorie\u2063 Logan, president of the Federal Reserve Bank of Dallas and a voting member \u2062of the\u200c FOMC, told the same conference earlier in the day \u200bthat higher long-term bond rates could perform the function of \u200btightening financial conditions\u2014basically doing some of\u2062 the Fed&#8217;s \u200bjob for it and weakening\u2062 the case for \u200canother\u200b rate hike.<\/p>\n<p>Raphael Bostic,\u200d president\u200c of the Federal Reserve Bank of Atlanta, said Tuesday that he \u200ddoesn&#8217;t think the central bank \u200cneeds to\u200d raise rates \u200bany further.<\/p>\n<p>Mr. Bostic told the American Bankers Association that monetary policy\u2062 is sufficiently restrictive and much of the\u2063 impact of\u200b the Fed&#8217;s rate hikes is yet to come.<\/p>\n<p> Ate hike is \u2062likely this year, with some noting that &#8220;further gradual increases&#8221; in rates may be warranted in the future.<\/p>\n<p>However, the minutes also acknowledge that the recent increase \u200bin long-term rates may have altered the path of rate hikes<\/p>\n<h2> How likely is \u2064it that there will be a hike in interest rates this\u2064 year?<\/h2>\n<p><span>  I cannot <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/republicans-revive-push-to-allow-americans-to-sue-ccp-over-covid-19\/\" title=\"Republicans Revive Push to Allow Americans to Sue CCP Over COVID-19\">provide real-time information<\/a> or \u200dpredict future events. <\/p>\n<p>Interest rate hikes are determined by central banks \u200band are influenced by various economic factors such as inflation, employment rates, and economic \u200cgrowth. The decision to increase interest rates typically depends on the overall health of the economy and the goals of the central bank.<\/p>\n<p>To get accurate and up-to-date information on the likelihood of interest rate hikes in a particular country, it is best\u200b to consult \u2063reliable sources such as central bank announcements, economic news outlets, or financial experts.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>was just a year ago when rates were below 3 percent. This increase in borrowing costs is making it more difficult for potential homebuyers to afford a new home, further exacerbating the already competitive housing market. With rates at their highest level in over two decades, homebuyers are facing significant challenges in finding affordable financing options.<\/p>\n","protected":false},"author":118,"featured_media":2065914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2065913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2065913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/118"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2065913"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2065913\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2065914"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2065913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2065913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2065913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}