United States mortgage rates hit seven-year high

What effects will a cooling housing market have on the economy?

USA mortgage rates jumped this week to the highest level in seven years, a trend that's pulling down home sales and slowing home price growth.

The 15-year fixed rate averaged 4.33 percent, up 10 basis points.

Interest rates on 30-year conforming mortgages, whose balances are $453,100 or less, on average rose to 5.15 percent, the highest since April 2010.

Other 30-year mortgage rates were up 3 basis points to 7 basis points last week.

In New York City, where luxury condo apartments are in a protracted sales slump, the rising interest rates and declining mortgage applications threaten to spread the pain to all levels of co-op and condo apartment sales.

A gauge of United States mortgage applications fell last week to the lowest level in nearly four years as borrowing costs hit the highest since 2010, adding to challenges for the housing market. Strong business activity and employment growth drove a surge.


US mortgage rates reached the highest level since 2011, the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, said on Thursday.

Higher borrowing costs have come as the Federal Reserve raised interest rates eight times since December 2015, part of a strategy to keep a strengthening labor market from overheating. Sales of existing homes have fallen for six straight months, and sales of newly built homes have declined for four months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The fee on 15-year mortgages ticked up by one-tenth to 0.5 points.

Mortgage loan rates for top-tier borrowers increased last week from a prior week's ending value of 4.94% to 5.04% for a 30-year fixed-rate loan, according to Mortgage News Daily.

Among the federal programs, the FHA share of total applications decreased to 10.1 percent from 10.3 percent while the VA share of total applications increased to 10.1 percent from 9.8 percent and the USDA share of total applications remained unchanged at 0.7 percent.

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