US Mortgage Loan Interest Rate at 6.7%... Highest Since 2007

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Mortgage rates in the United States have soared to their highest level since 2007.

Freddie Mac, a U.S. government-sponsored mortgage company, announced on the 29th (local time) that the average 30-year fixed mortgage rate rose by more than 0.4 percentage points from 6.29% last week to 6.7% this week. This is more than double the 3.01% rate from a year ago and the highest since July 2007.

Sam Carter, Chief Economist at Freddie Mac, stated, "Uncertainty and volatility in the financial markets are significantly impacting mortgage rates."

Mortgage rates have been rising sharply this year as the U.S. central bank, the Federal Reserve (Fed), continues to raise interest rates. The Fed recently implemented three consecutive giant steps (0.75 percentage point increases in the benchmark rate) and has also raised its future rate outlook. Amid expectations of continued aggressive rate hikes, the yield on the U.S. 10-year Treasury bond briefly surpassed 4%, reflecting high levels in the bond market.

This sharp rise in mortgage rates is expected to directly impact the U.S. housing market. The recently released July S&P CoreLogic Case-Shiller Home Price Index for 20 major cities showed a 0.4% decline from the previous month, marking the first drop in 10 years.