US mortgage interest rates surpass 6 per cent for the first time since 2008



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US mortgage interest rates surpass 6 per cent for the first time since 2008

On Wednesday, Mortgage Bankers Association (MBA) data had unveiled that the most popular US mortgage loans had averaged above 6 per cent for the first time since 2008 a week earlier. Adding to further holocaust, the long-term mortgage rates are now hovering at a level which are nearly 100 per cent up compared to a year earlier.

In the matter of the fact, latest rise in US mortgage rates which have been soaring at a breakneck pace, comes over the heels of a hawkish US Fed that had raised its benchmark borrowing cost by 225 bps (basis percentage point) since March this year.

Aside from that, followed by the release of MBA data, several analysts had warned of further increase in US mortgage rates as bets of a 100-bps rate-hike on September Fed policy meet has been looming large with PPI data closely mirroring CPI data.

Earlier in the day, US Producer Price Index data had unfurled an increase, which eventually raised the bets of a rate-hike by 100 bps from an earlier 75 bps.

US mortgage rates hit the highest since 2008

On top of that, according to MBA data, US 30-year fixed-rate mortgage loans rose by 7bps to 6.01 per cent over the week that ended on September 9, a level never seen since the end of great financial Recession between 2007-2009.

Aside from that, the MBA data also had unveiled that the volume of mortgage applications fell to 1.2 per cent last week compared to a week earlier, while US home sales were jolted to a six-and-a-half years low in July.