Mortgage Rates 7 November 2024

Mortgage Rates Hit Highest Level in 20 Years

Mortgage rates have hit their highest level in 20 years, according to Freddie Mac. The average rate on a 30-year fixed-rate mortgage is now 7.08%, up from 6.95% last week. This is the highest level since April 2002.

What's Driving the Increase in Mortgage Rates?

There are a few factors driving the increase in mortgage rates. One factor is the Federal Reserve's decision to raise interest rates. The Fed has raised interest rates five times this year in an effort to combat inflation. As interest rates rise, mortgage rates also tend to rise.

Another factor driving the increase in mortgage rates is the global economic outlook. The war in Ukraine and the ongoing COVID-19 pandemic have created uncertainty in the financial markets. This uncertainty has led to an increase in demand for safe investments, such as bonds. As demand for bonds increases, their prices rise and their yields fall. This, in turn, leads to an increase in mortgage rates.

How Will the Increase in Mortgage Rates Affect Homebuyers?

The increase in mortgage rates will make it more expensive for homebuyers to purchase a home. A higher mortgage rate means that homebuyers will have to pay more interest on their loan, which will increase their monthly mortgage payments. This could make it more difficult for some homebuyers to qualify for a mortgage or to afford a home.

What Can Homebuyers Do?

If you're planning to buy a home, there are a few things you can do to offset the impact of higher mortgage rates.

• Shop around for the best mortgage rate. There are a number of different lenders out there, so it's important to shop around and compare rates before you choose a lender.
• Get pre-approved for a mortgage before you start shopping for a home. This will give you a better idea of how much you can afford to spend on a home and will help you avoid wasting time looking at homes that you can't afford.
• Make a larger down payment. A larger down payment will reduce the amount of money you need to borrow, which will lower your monthly mortgage payments.
• Consider an adjustable-rate mortgage (ARM). ARMs typically have lower interest rates than fixed-rate mortgages, but the interest rate can adjust over time. This could be a good option if you're planning to stay in your home for a short period of time.