Mortgage rates are now at their highest level since the height of the Great Recession, according to data released Thursday by mortgage provider Freddie Mac.
Freddie Mac reported that the 30-year fixed-rate mortgage rate is 6.02%, up from 5.89% last week.
This is its highest level since a 6.46% rate on October 30, 2008 – just two weeks after the Dow Jones Industrial Average had its worst week ever at the time, dropping by 18%.
The rates are more than double what they were one year ago, when they were 2.86%.
The rise in mortgage rates comes as the Federal Reserve seeks to raise interest rates significantly to curb severe inflation. Prospective homebuyers aren't likely to be resting anytime soon, as Tuesday's worse-than-expected inflation report stumbled markets and led some investors to expect a 100 basis point rate hike.
Sam Khater, chief economist at Freddie Mac, attributed the interest rate hike in a statement to "hotter-than-expected inflation numbers this week." Khater said that although high mortgage rates should dampen demand for homes, the decline in home prices "should not be significant" because inventory is still insufficient.
Mortgage rates hit their highest level since 2008 in the latest bleak sign for the housing market (Forbes)