Average long-term mortgage rates climb to 6.29% this week

WASHINGTON — Average long-term U.S. mortgage rates jumped by more than a quarterpoint this week to their highest level since 2008 as the Federal Reserve intensified its effort to tamp down decades-high inflation and cool the economy.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate climbed to 6.29%, from 6.02% last week. That's the highest its been since October of 2008 when the housing market crashed, triggering the Great Recession.

Rapidly rising mortgage rates threaten to sideline even more homebuyers after more than doubling in 2022. Last year, prospective homebuyers were looking at rates well below 3%.

On Wednesday, the Federal Reserve bumped its benchmark borrowing rate by another three-quarters of a point in an effort to constrain the economy, its fifth increase this year and third consecutive 0.75 percentage point increase.

Perhaps nowhere else is the effect of the Fed's action more apparent than the housing sector. Existing home sales have been in decline for seven straight months as the rising cost to borrow money puts homes out of reach for more people.

The National Association of Realtors said Wednesday that existing home sales fell 0.4% last month from July to a seasonally adjusted annual rate of 4.80 million.

Sales fell 19.9% from August last year, and are now at the slowest annual pace since May 2020, early in the pandemic..