{"id":49757,"date":"2023-08-17T17:23:43","date_gmt":"2023-08-17T21:23:43","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/mortgage-rates-are-surging-at-their-fastest-pace-on-record-heres-what-that-could-mean\/"},"modified":"2023-08-17T17:23:45","modified_gmt":"2023-08-17T21:23:45","slug":"mortgage-rates-are-surging-at-their-fastest-pace-on-record-heres-what-that-could-mean","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=49757","title":{"rendered":"Mortgage Rates Are Surging At Their Fastest Pace On Record\u2014Here’s What That Could Mean"},"content":{"rendered":"
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Topline<\/h2>\n

Mortgage rates just touched their highest level since 2001, coinciding with still persistent fears about a recession and rising at a pace not seen since a 1980s downturn eerily similar to today.<\/p>\n

Key Facts<\/h2>\n
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American homebuyers now face an average 30-year fixed mortgage rate of 7.09%, according to borrowing data released by federal mortgage servicer Freddie Mac.<\/p>\n<\/p><\/div>\n

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That\u2019s a roughly 150% increase from the same week in 2021, when the average rate was 2.86%.<\/p>\n<\/p><\/div>\n

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That\u2019s the fourth-largest two-year increase in 30-year mortgage rates according to Freddie Mac data dating back to 1971 analyzed by Forbes<\/em>; the three largest increases came over the last year as well.<\/p>\n<\/p><\/div>\n

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At the onset of the last seven recessions, 30-year mortgage rates were an average of 11.6% higher than they were two years prior, comparing unfavorably to the average 1.1% two-year increase over the last 50 years.<\/p>\n

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The only other instances when mortgage rates jumped by 50% or more over a 24-month period came between 1979 and 1981, coinciding with a pair of recessions marked by surging inflation and an aggressive Federal Reserve, a perhaps troubling parallel for those hoping for the U.S. to avoid a recession in coming months.<\/p>\n<\/p><\/div>\n

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Potentially more troubling, National Association of Realtors economist Lawrence Yun told MarketWatch he could foresee 30-year rates surging past 8%, \u201cre-freezing\u201d the housing market, a key component of economic activity, as measured by the nation’s gross domestic product.<\/p>\n<\/p><\/div>\n<\/div>\n

Key Background<\/h2>\n

Mortgage rates, which loosely follow the federal funds rate set by the Fed, spiked from about 3% to over 6% in a six-month span last year as the central bank hiked interest rates at its quickest pace since the infamous Paul Volcker-led campaign four decades ago. Mortgage rates are still far below where they were in the 1980s, when they spiked at more than 18%. This hiking cycle, overseen by Fed chairman Jerome Powell, has yet to result in as severely painful economic conditions, but several indicators still point toward a recession on the horizon. Specifically, the difference in yields for short and long-term bonds, which is a proxy for investor confidence in the economy over the short-term, predicts a roughly two-thirds chance of a recession coming over the next year. The yield for 10-year U.S.-issued bonds surged to its highest level since 2008 this week, further indicating a breakdown in faith in the economy.<\/p>\n

Surprising Fact<\/h2>\n

Homes have become considerably more expensive as mortgage rates doubled. The median home in the U.S. sold for $422,137 last month, according to RedFin data, compared to $318,100 a year ago.<\/p>\n

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Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Topline Mortgage rates just touched their highest level since 2001, coinciding with still persistent fears about a recession and rising at a pace not seen since a 1980s downturn eerily similar to today. Key Facts American homebuyers now face an average 30-year fixed mortgage rate of 7.09%, according to borrowing data released by federal mortgage […]<\/p>\n","protected":false},"author":1,"featured_media":49758,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-49757","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nMortgage Rates Are Surging At Their Fastest Pace On Record\u2014Here's What That Could Mean | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Topline Mortgage rates just touched their highest level since 2001, coinciding with still persistent fears about a recession and rising at a pace not seen\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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