Fed Rate Hike Drives Mortgage Rates Above 7%

The Federal Reserve has raised its benchmark interest rate by a quarter percentage point to 3.75% to 4%, citing elevated inflation and an ongoing effort to bring prices back towards their 2% target.

This move affects mortgage rates, which are closely tied to longer-term market rates, including the yield on the 10-year Treasury note.

The average 30-year fixed mortgage rate is now around 7.11%, according to Mortgage Research Center data from September 24.

Higher mortgage rates can increase monthly payments for homebuyers and reduce the amount they can afford to borrow, potentially slowing demand in the housing market.