(Washington) Interest rates on mortgages in the United States, which have been climbing since the beginning of the year due to measures taken to combat high inflation, have exceeded 7%, their highest since over 20 years.
Posted at 11:24 a.m.
The average rate on a 30-year fixed-rate loan, the most common in the United States, now stands at 7.08%, the first since April 2002, according to data released Thursday by the Freddie real estate refinancing group. Mac, which refer.
A year ago, the rate averaged 3.14%.
This new increase “will lead to greater stagnation in the real estate market”, commented the group in its press release.
“As inflation persists, consumers are seeing costs rise at every turn,” Freddie Mac said, adding that this is causing “many potential buyers” to wait, “pushing demand and house prices even lower.”
The real estate market had jumped in 2020 and 2021 thanks to historically low interest rates and the development of teleworking, which had allowed many families to move away from city centers.
But it is now suffering from rising rates, following the tightening of monetary policy by the US Federal Reserve (Fed) in an effort to fight inflation.
“Rising real estate rates increased the monthly repayment by $1,000,” Nadia Evangelou, economist and head of forecasting for the National Federation of American Realtors (NAR), said in a statement.
Because “although interest rates reached historic lows in 2021, not everyone was able to take advantage of these low rates” and now, “with real estate rates of 7%, only 15% of black households can currently afford the typical home, compared to 30% of white households,” she adds.
Home loan applications fell 1.7% last week, the sixth consecutive weekly decline, according to data from the Mortgage Bankers Associations.
The Case-Shiller index, widely followed to assess real estate market prices, but published with a month’s delay, for its part revealed that in August, the rise in prices had slowed drastically, to +13% over one year. (against +15.6% in July).
Over one month, prices in the 20 largest American cities even fell by 1.3%, unheard of since March 2009.