The average long-term U.S. mortgage rate rose for a fifth straight week to 7.23% — the highest it has reached since 2001, according to data released Thursday by mortgage giant Freddie Mac.
The average increased from 7.09% last week, which had marked the first time the measure had eclipsed 7% since November.
The summer surge in rates has increased the monthly cost of homeownership by hundreds of dollars, when compared with the average at this time last year of 5.55%. Higher rates have made buying a house more expensive for Long Island homebuyers, who are also dealing with record home prices. The median price was $725,000 in Nassau County and $575,000 in Suffolk County last month.
Last year at this time, the average 30-year fixed mortgage rate was 5.55%.
Mortgage rates have risen this month as economic data has shown signs that the U.S. economy may be holdings its strength more than expected to the Federal Reserve’s campaign of increases to its benchmark interest rate. Fewer economists are predicting a recession within the next year than had been earlier this year, according to Reuters.
Mortgage rates tend to move in the same direction as the yield on 10-year U.S. Treasurys, which reached its highest point since 2007 on Monday before falling over the past few days.
Investors’ demand for U.S. Treasurys, expectations about inflation and the Fed’s actions all influence borrowing costs for home loans. They typically rise during periods of inflation and fall when there are greater fears about a recession.
“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” Sam Khater, chief economist at Freddie Mac, said in a statement. “As rates remain high and [the] supply of unsold homes woefully low, incoming data shows that existing homes sales continue to fall.”
Khater noted that nationally, the…
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