Daily 30-year mortgage rates hit a milestone 8% on Wednesday afternoon, putting more pressure on home buyers.
A survey by Mortgage News Daily’s showed the 30-year fixed mortgage rate increased 0.08 percentage point to 8.00% as yields rose on
10-year Treasury debt.
The yield on the 10-year, which helps determine mortgage rates, topped 4.9% on Wednesday.
The climb in mortgage rates is further bad news for prospective home buyers, who have been contending with low inventory, relatively stable prices, and higher financing costs. The recent moves are expected to have driven September home sales lower.
Freddie Mac
is set to publish weekly data on mortgage rates on Thursday. The last time this closely watched gauge hit 8% was in 2000, according to Freddie Mac.
Other data also show that rates continue to climb. The average 30-year fixed rate on loans with conforming balances last week was 7.70%, up from 7.67% the previous week, the Mortgage Bankers Association said Wednesday. Daily rates, such as those published by Mortgage News Daily, are frequently higher than weekly measures.
Higher rates have hurt demand for new loans. The Mortgage Bankers Association said Wednesday that loan applications for purchases slumped 6% on a seasonally adjusted basis for the week ended Oct. 12 from the prior week, according to the trade group’s Market Composite Index. The overall index for applications to either purchase or refinance a home fell 6.9% on a seasonally adjusted basis, the weakest reading since 1995, according to the association.
“Homebuying activity continues to pull back given reduced purchasing power
from higher rates and the ongoing lack of available inventory,” Joel Kan, MBA’s deputy chief economist, said in a release.
Housing starts, a closely watched indicator of new-home construction, rose 7.0% in September to a seasonally adjusted annual rate of 1.358 million, after a big drop the previous month, according to Census Bureau data released Wednesday. The increase was led by multifamily projects.
Despite the September housing-start figure, the
SPDR S&P Homebuilders exchange-traded fund
(ticker: XHB) was down 2.6% on Wednesday. The
iShares U.S. Home Construction
ETF (ITB) was off 2.1%.
—Shaina Mishkin contributed to this article.
Write to Mary Romano at [email protected]
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