The average interest rate for 30-year fixed-rate mortgages hit the 6% mark for the first time in 14 years, according to a Mortgage Bankers Association (MBA) survey released Wednesday.
The MBA’s latest Weekly Mortgage Applications Survey found the average interest rate for the most popular U.S. home loan rose from 5.94% the week ending Sept. 2 to 6.01% the week ending Sept. 9.
Last week’s average rate of 6% marks the first time since 2008 that it has hit that figure and is “essentially double what it was a year ago,” Joel Kan, the associate vice president of economic and industry forecasting at MBA, said in a press release.
The average interest rates for other common mortgage types also increased. The average rate for 30-year fixed jumbo mortgages rose to 5.56% from 5.46%, and the 30-year fixed FHA-backed mortgage’s average rate went up slightly to 5.71%, according to the survey.
Fifteen-year fixed-rate mortgage rates jumped from 5.23% to 5.30% week over week, according to the survey. The average rate for a 5/1 adjustable rate mortgage also went up slightly.
Mortgage loan application volume fell 1.2% on a seasonally adjusted basis from the prior week, the survey found. Notably, the refinance index dropped 4%.
Mortgage rates rose sharply during the first six months of the year as the Federal Reserve started hiking interest rates in an effort to combat inflation.
At the Fed’s meeting next week, policymakers are expected to approve another supersized rate hike.
The interest rate sensitive housing market has cooled off significantly in recent months. The number of home sale cancellations reached a two-year high in July, and purchases of new single-family homes have fallen for six consecutive months. Builder sentiment recently reached record lows as well.