Current:Home > StocksMortgage rates touch 8% for the first time since August 2000 -ProgressCapital
Mortgage rates touch 8% for the first time since August 2000
View
Date:2025-04-12 17:46:13
Mortgage rates hit 8% on Wednesday, the highest level since August 2000 and deepening an affordability crisis for homebuyers.
The average rate for a 30-year loan touched 8% on Wednesday, according to Mortgage News Daily, which surveys a range of lenders to determine current home loan rates.
Higher borrowing costs — paired with elevated prices — have made home buying unaffordable for a larger swath of buyers, economists and researchers say. In about a dozen U.S. states, families with a median income for their area cannot afford a mortgage, according to recent research from Moody's. That's up from only two states in 2019.
"The 23-year high in mortgage rates also goes a long way towards explaining why sellers have withdrawn from the market," Thomas Ryan, a property economist with Capital Economics, said in a research note Wednesday. "The increase in mortgage costs homeowners would incur by getting a new mortgage to move has stopped many from attempting to move altogether and led listings of new homes for sale to drop by a third."
Rising mortgage rates come at a time when median home prices have remained elevated for most of 2023. The national median home price was $430,000 last month, up from $400,000 in January, according to Realtor.com.
Still, other groups tracking home loans peg the 30-year mortgage at slightly below 8%. The Mortgage Bankers Association (MBA) said on Wednesday that the typical home loan stood at 7.7% this week, while Freddie pegged the average rate at 7.57% as of Oct. 12.
Impact on home sales
Even high-income earners in cities like Boston, Miami, Phoenix, Salt Lake City and Seattle cannot afford a mortgage under the median home prices in those areas, a LendingTree report released Tuesday found.
"Ultimately, until mortgage rates and home prices both start to show more significant and sustained declines, affordability challenges are likely to persist for high and low income earners alike," LendingTree Senior Economist Jacob Channel said in the report.
Higher mortgage rates have contributed to the decline in mortgage applications and home sales, according to data from the MBA and the National Association of Realtors.
Mortgage rates have jumped this year partly because the Federal Reserve raised its benchmark rate several times in an attempt to cool inflation.
A group of housing associations this month urged Fed Reserve officials to hold off on additional rate hikes and to take other actions that would help lower mortgage rates. The Community Home Lenders of America, National Association of Realtors and Independent Community Bankers of America also sent a letter to U.S. Department of Treasury Secretary Janet Yellen this month asking for relief.
Rising mortgage rates have made "a significant negative effect on the ability of a family to qualify for and purchase a home, particularly for first-time homebuyers," the groups said in a letter to Yellen.
- In:
- Mortgage Rates
- Home Sales
- Affordable Housing
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
TwitterveryGood! (474)
Related
- Kehlani Responds to Hurtful Accusation She’s in a Cult
- Family of student charged in beating death of Arizona teen Preston Lord accused of 'cover-up'
- Small businesses apply for federal loans after Baltimore bridge collapse
- Kentucky governor vetoes nuclear energy legislation due to the method of selecting board members
- 51-year-old Andy Macdonald puts on Tony Hawk-approved Olympic skateboard showing
- 78 dogs rescued: Dog fighting operation with treadmills, steroids uncovered in Alabama
- Expand or stand pat? NCAA faces dilemma about increasing tournament field as ratings soar
- Finland will keep its border with Russia closed until further notice over migration concerns
- Carolinas bracing for second landfall from Tropical Storm Debby: Live updates
- Family of student charged in beating death of Arizona teen Preston Lord accused of 'cover-up'
Ranking
- Billy Bean was an LGBTQ advocate and one of baseball's great heroes
- LeBron James supports the women's game. Caitlin Clark says 'he's exactly what we need'
- Soccer Star and Olympian Luke Fleurs Dead at 24 in Hijacking, Police Say
- Suki Waterhouse Shares First Photo of Her and Robert Pattinson's Baby
- Will the 'Yellowstone' finale be the last episode? What we know about Season 6, spinoffs
- Kentucky governor vetoes nuclear energy legislation due to the method of selecting board members
- Suki Waterhouse Shares First Photo of Her and Robert Pattinson's Baby
- In Alabama Visit, Buttigieg Strays Off The Beaten Path. Will It Help Shiloh, a Flooded Black Community?
Recommendation
Olympic men's basketball bracket: Results of the 5x5 tournament
What Sean Diddy Combs Is Up to in Miami After Home Raids
The Rock at WrestleMania 40: What to know about return to WWE for 'The People's Champion'
Judge orders Border Patrol to quickly relocate migrant children from open-air sites in California
Daughter of Utah death row inmate navigates complicated dance of grief and healing before execution
A Pennsylvania County Is Suing the Fossil Fuel Industry for Damages Linked to Climate Change
Mississippi capital to revamp how it notifies next of kin about deaths with Justice Department help
Rashee Rice told police he was driving Lamborghini in hit-and-run car accident, lawyer says