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Mortgage rates top 7% for the first time in more than 2 years
CBS News • • business
Key Points:
- Mortgage rates for the 30-year fixed-rate loan surged to 7.12% the week ending Sept. 18, marking the highest level since May 2024, according to the Mortgage Bankers Association (MBA).
- Rising rates are increasing borrowing costs amid near-record housing prices, prompting more buyers to choose adjustable-rate mortgages (ARMs) that offer lower initial rates.
- Rates for 5/1 ARMs remain over 1% lower than fixed-rate mortgages, providing a more affordable option for some buyers, said MBA economist Mike Fratantoni.
- The 30-year fixed mortgage rate typically follows the 10-year Treasury yield, which has climbed recently due to inflation concerns, government debt, and higher borrowing costs.
- The Federal Reserve's recent quarter-point interest rate hike and geopolitical tensions have contributed to rising Treasury yields and mortgage rates, potentially slowing housing market activity as borrowing becomes more expensive.
