Sep 15, 2022 - Economy

Mortgage rates hit 6% for first time since 2008 housing crash

A 'for sale' sign hangs in front of a home on June 21, 2022 in Miami, Florida.

A 'for sale' sign hangs in front of a home in Miami, Florida. Photo: Joe Raedle/Getty Images

Mortgage rates have reached 6% for the first time since November 2008, according to new data Freddie Mac released Thursday.

Why it matters: Rising mortgage rates could dissuade prospective homebuyers, and particularly first-time buyers, from pursuing ownership. The climbing rates have sent demand for mortgages plummeting compared to last year.

By the numbers: The 30-year fixed-rate average rose to 6.02%, which is higher than the 5.89% rate last week. A year ago, the figure was 2.86%, per Freddie Mac.

  • Freddie Mac said the uptick might put "downward pressure on home prices," but any decreases won't be large because there's still a shortage of homes for sale.
  • New mortgage applications have dropped nearly 30% since the same period last year, according to data from the Mortgage Bankers Association, obtained by CNBC.

What they're saying: "For real estate markets, the rising costs of borrowing are further cooling demand for homes and deepening the affordability crisis," said George Ratiu, manager of economic research, in a statement to Axios.

  • "The buyer of a median-priced home is looking at a monthly payment of $2,100 at today’s mortgage rate, a 66% jump from last year," Ratiu said. "With real median household incomes remaining relatively unchanged, many first-time homebuyers are finding the door to homeownership is closed for this season."

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