Oct 14, 2022 - Economy
Mortgage rates hit 20-year high at nearly 7%
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Mortgage rates are at their highest point since April 2002.
Why it matters: The recent surge in rates has slammed the brakes on activity in the residential real estate sector.
- Plunging housing affordability could also become a contentious political issue.
The latest: The average rate on the 30-year fixed rate mortgage hit 6.92%, according to Freddie Mac. Just a year ago it hovered around 3%.
- In October 2021, the principal and interest payment on the median-priced American home was about $1,500 a month, according to our own tinkering on Bankrate's mortgage calculator.
- Now: It's nearly $2,400 a month, almost $900 more.
The bottom line: The Fed’s rate increase regimen is designed to slow the economy. It's working — and the housing slump is well underway.
