Current Events > Mortgage rates up, housing prices remain stable. Will the bubble ever burst?

(+) Yeah! (+)

Sept 14 (Reuters) - The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed on Wednesday.
Rising mortgage rates are increasingly weighing on the interest-rate sensitive housing sector as the Federal Reserve pushes on with aggressively lifting borrowing costs in order to tame high inflation. The central bank has raised its benchmark overnight lending rate by 225 basis points since March.
Expectations for Fed tightening have led to a surge in Treasury yields since the start of this year. The yield on the 10-year note acts as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose by 7 basis points to 6.01% for the week ended Sept. 9, a level not seen since towards the end of the financial crisis and Great Recession.
The MBA also said its Market Composite Index, a measure of mortgage loan application volume, declined 1.2% from a week earlier and is now down 64.0% from one year ago. Its Refinance Index fell 4.2% from the prior week and was down 83.3% compared to one year ago.
A worse-than-expected key inflation reading on Tuesday cemented expectations the Fed will be forced to deliver a third straight 75-basis point interest rate hike at its policy meeting next week, with investors now predicting the central bank will have to hike rates faster and further than previously thought. read more
The impact of higher interest rates is being felt across the housing sector. New home sales plunged to a 6-1/2-year low in July while home resales and single-family housing starts are at two-year lows. But house prices remain elevated amid a critical shortage of affordable homes, making a housing market collapse unlikely.

https://www.reuters.com/markets/us/ us-mortgage-interest-rates-top-6-first-time-since-2008-2022-09-14/

I could afford to buy a house 2 years ago, can't afford rent now :(

Housing prices doubled. Cost of borrowing more than doubled. Prices still not falling.

Where tf is all the money coming from? How does it keep going on like this?

No one can afford to rent. No one can afford to buy. The crash is inevitable.

I dont know if Id agree about prices not going down. I keep seeing price decrease after price decrease on homes here. The data is still coming in. In our neighborhood the houses just sit unsold for weeks even months. Meanwhile Redfin sends me emails about how the value of my home went up. Um no it didnt, its just that the houses sitting around that are comparable to mine havent sold so it hasnt adjusted yet.