The US central bank’s latest hike lifted the benchmark interest rate to a range of 3.75% to 4% — the highest level since 2008.
Even though the 30-year mortgage rate slumped last week, the 6.95% level is still more than twice as high as at the beginning of 2022 and compares with 3.09% a year ago.
Jacked-up borrowing costs have made it much harder for potential homebuyers to enter the market.
Meanwhile, fears about a coming recession and high inflation have also dampened demand. Demand for mortgages last week fell for the sixth time in a row, according to Mortgage Bankers Association out Wednesday.
Soaring mortgage rates have sparked concern among market strategists that the US housing market is in freefall, with home prices at risk of plunging as much as 20%.
