The average interest rate for 30-year mortgages in the United States reached 6.94 percent, the highest level since 2002, while demand for mortgage loans reached the lowest level since 1997.
The average interest rate on 30-year mortgages in the United States rose to 6.94 percent from 6.81 percent. The Mortgage Bankers Association (MBA) reported that mortgage applications fell 4.5 percent in the week ending Oct. 14 compared with the previous week.
At highest Level Since 2002
The national average 30-year mortgage rate rose to 6.94 percent from 6.81 percent. This puts interest rates at their highest level since 2002.
Joel Kan, MBA vice president of economic and industry forecasting, said the decline in mortgage applications has reached its lowest level since 1997, while the average 30-year mortgage rate has reached its highest level in the past 20 years.
Kan said the pace and magnitude of rate increases have severely hampered refinancing activity and exacerbated the market’s current affordability problems.
Decline In Housing Starts In September Stronger Than Expected
Meanwhile, the U.S. Department of Commerce released figures for housing starts and building permits in September.
According to the data, housing starts in September fell 8.1% to 1.44 million.
The expectation was for 1.47 million housing starts, and this figure was higher than market expectations. In August, this figure was given as 1.56 million housing starts.
Due to rising material costs and borrowing rates, housing starts in September were down 7.7% from a year earlier.
Buılding Permits Rose More Than Expected
Building permits rose 1.4% to 1.564 million in September.
Contrary to market forecasts, building permits rose to 1.53 million in the period. In August, 1.54 million building permits had been issued.
In September, building permits in the U.S. fell 3.2% from a year earlier.
Experts believe that monetary tightening by the U.S. Federal Reserve (Fed) to combat hyperinflation has had a significant impact on the housing market.
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