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U.S. mortgage interest rates jump to 7.16%, highest since 2001

The central bank is expected to raise rates by 75 basis points for a fourth straight time at the conclusion of its next policy meeting on Nov. 1-2.

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The average interest rate on the most popular U.S. home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.

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The average contract rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended Oct. 21 while the MBA's Market Composite Index, a measure of mortgage loan application volume, fell 1.7% from a week earlier. Mortgage application activity is at its slowest pace since 1997.

Mortgage rates have more than doubled since the beginning of the year, as the Federal Reserve pursues an aggressive path of interest rate hikes to rein in stubbornly high inflation.

The central bank is expected to raise rates by 75 basis points for a fourth straight time at the conclusion of its next policy meeting on Nov. 1-2.

Those actions, designed to cool the economy sufficiently to curb price pressures, have weighed heavily on the interest-rate-sensitive housing sector as expectations for Fed tightening have led to a surge in Treasury yields.

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The yield on the 10-year note acts as a benchmark for mortgage rates.

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This story was written by one of our partner news agencies. Forum Communications Company uses content from agencies such as Reuters, Kaiser Health News, Tribune News Service and others to provide a wider range of news to our readers. Learn more about the news services FCC uses here.

Related Topics: MONEY AND FINANCE
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