By Aarthi Swaminathan
It’s getting more expensive to buy a home.
Mortgage rates increased again this week, sensing further aggressive rate hikes from the Federal Reserve.
The 30-year fixed-rate mortgage averaged 5.89% as of Sept. 8, according to data released by Freddie Mac on Thursday.
That’s up 23 basis points from the previous week—one basis point is equal to one hundredth of a percentage point, or 1% of 1%.
The rise in rates is bad news for prospective buyers, as it potentially adds hundreds of dollars to their mortgage payments.
The median price of an existing home in the U.S. was $403,800, as of July, the National Association of Realtors said.
Mortgage rates have jumped to the highest level since late November 2008.
A year ago, the 30-year was at 2.88%.
The average rate on the 15-year mortgage also rose over the past week to 5.16%.
The adjustable-rate mortgage averaged 4.64%, up from the prior week.
“Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy to combat elevated inflation,” Sam Khater, chief economist at Freddie Mac, said in a statement.
But there is some good news for home buyers: The “dispersion of rates has also increased,” Khater noted. So prospective buyers can shop around for a better rate.
Getting just one additional quote saves a borrower on average $1,500 over the life of a loan, Khater said, and around $3,000 if you get five rate quotes.
Mortgage applications continue to fall as rates edge up towards 6%.
Higher rates, high home prices, and recession fears are all compelling buyers to wait.
Sellers and builders, fed up with the drop in demand, are pivoting to the rental market, which is still seeing strong interest.
The yield on the 10-year Treasury note fell below 3.3% in morning trading on Thursday.