US Mortgage Rates Soar to Two-Year High Amid Fed Rate Hikes

The average US fixed 30-year mortgage rate has reached its highest level in more than two years, climbing to 7.12%.

This increase is attributed to a short-term policy interest rate hike by the Federal Reserve aimed at curbing persistent inflation and rising oil prices that have pushed up underlying residential borrowing benchmarks.

The Mortgage Bankers Association reported that the average contract rate on a 30-year fixed-rate loan increased by 15 basis points to 7.12% during the week ended September 18, with lending costs tracked closely to movements in US Treasury yields.

Since late February, mortgage rates have risen by more than a full percentage point due to joint military actions involving the United States and Israel against Iran, which elevated energy markets and curtailed activity across the domestic real estate sector.