Mortgage Rates Hit 6.92%, the Highest in 20 Years

https://www.marketwatch.com/articles/mortgage-rates-hit-6-92-the-highest-in-20-years-51665670169

HYPERLINK has full article

snip

The rate on a popular type of home loan increased this week to its highest level in 20 years, according to data released Thursday.


The average rate on a 30-year fixed loan increased to 6.92% as of Thursday, according to the results of Freddie Mac’s weekly Primary Mortgage Market Survey—the highest such rate since April 2002.................

a leading indicator of buyer demand—was 39% lower than the same week last year, the Mortgage Bankers Association said earlier this week.

end snip

Not good news for anyone looking to purchase a home. For those folks who just a year ago could get a $300,000 mortgage for $1,347 per month, now must pay $1,996 per month.

That's a 50% increase in payment.

Come November, the voters have an opportunity to tell politicians how they feel about all of this. Let's see if they do the right thing

Democrat votes have consequences; tough home-ownership is one of those

 

New add brings it how, thank you Australia and sky news for reporting it!

 

it will be pinned as racist despite being factual. Back to the thread topic; we really need to wake up as a nation and stop listening to the Democrat media spin

 

Just wondering how Republicans will bring mortgage rates back down, if they take back the House and Senate next month? Please be specific.

 

Hmm.. Just wondering how Democrats will bring mortgage rates back down since they are in power now. Please be specific....

 

Oh, I should probably tell you rebublicans don't "do good things things" at least not for regular people. They are the "stop good things" for regular people party.

 

It would be interesting if you flew that flag in 'fly-over country'.

 

I live in MN, I went in Fargo for work last few weeks. I don't wear my politics on my sleeve but when it comes up I speak my piece. Some people get angry, others curious, most try and change the subject.

 

Why do you make the assumption that Republicans don't do good things for regular people? I'm not a Republican, but I see plenty of them doing plenty for 'regular' people.

 

No assumptions made. Maybe individual repubs do nice things, but as a party, unless the problem impacts the rich, they will have no appetite to use their political power to alleviate it.

 

ohhhhhhh SNAP

 

News flash. Full Democrat control brought on this train wreck

 

It helped, but they're not responsible for it all. The Fed had to raise the rates to get inflation under control. Short term pain is better for long-term prosperity. Runaway inflation is not. We can't keep cashing checks are asses can't cover, the latter I primarily blame the Democrats for doing.

 

So, no GOP policies that will bring mortgage rates down? As expected, because it's the Federal Reserve that has control over mortgage rates. And who is Fed Chair? Powell, nominated by no other than Trump.

I am not saying that Powell has any choice, he needs to raise rates to try to tamp down inflation. However, if anybody thinks that voting in a GOP Congress in November will make their lives better, dream on.

 

They don’t plan on it — the FED has decided this is the best course of action to combat inflation that is pummeling the entire globe.

Care to tell us what Republicans plan to do?

 

OK, you are half way there. I guess that's the best I can ask for.

 

Why? What will democrats do? You suggest the FED is driving, but how does the fed impact energy for example? Care to actually try to defend what democrats have actually done?

 

Biden and his minions should have recognized inflation was becoming out of control a year ago. He denied inflation even existed. Rates should have been raised in the third quarter of 2021. Economists everywhere alerted Biden this was getting out of hand and claimed it was transitory or ignored them. So here we are.

 

I don’t understand what is too difficult to understand about “they are not going to do anything about it”.

The discussion is about interest rates. If you need to discuss energy policy do it in the relevant thread.

Sure don’t. I accept your concession that Republicans are just whining and have no idea how to actually fix it. Cheers.

 

A major cause of inflation is massive government spending, pouring dollars into the economy. The Trump administration is not innocent in this, but it certainly has increased massively under the current administration

 

And Democrats are not blameless for what happened under the Trump Administration.

Something that I've explained extensively in other threads. It could be said that they pushed and coerced Trump to have to do it.

The simple fact of the matter is, the media had convinced the majority of voters that spending more money was needed, and there was an upcoming election and Trump had to do it to maximize his chances of winning that election, otherwise it would allow Democrats to do the same thing.

The media did this to put Trump between a rock and a hard place. If he didn't do it, the swing voters would lay the blame on him for the economy and he would be more likely to lose the election. If he did do it, then it would make him look bad to his own supporters and cause them to have less enthusiasm for him, and would later make him look hypocritical if he criticized Democrats for wanting to spend too much. It was a clever political tactic.

 

Good point

 

Just so everyone understands, higher inflation rates put pressure on the Fed to have to allow interest rates to rise.

The larger the difference is between what the Fed is trying to keep interest rates at compared to what the free market wants interest rates to be at, the more inflation it causes, because it is very costly over time for the Fed to try to keep those rates down.
So it is a spiral.

Obviously when inflation rates are higher, the free market wants interest rates to go up to adjust for that inflation and take it into account. No one wants to lend out money at 2% when inflation is at 3%, for example.

Because then other people can borrow that money from the Fed and buy investment assets that have a rate of return.

The only way you get those lower interest rates is when the Fed prints lots of money and lends it out, at very cheap interest rates.
The lower those interest rates, the more inflation it will cause. So it pushes investment asset prices up. If an investment has a 4% rate of return (without risk), but the Fed will lend money at 2%, then it will push investors to be willing to pay twice as much money for that investment asset.

I know, it can be a little complicated to understand. But the key point to take away is that lowering interest rates costs money and causes inflation.

And the higher the inflation rate, the more costly it becomes for the Fed to keep interest rates down, which will cause even more additional inflation.

 

Haha, good one. Trump could have vetoed the spending, but he didn't. He rather put his signature on the checks, to make voters believe that the money came from him. He also said that he would have backed the 2022 stimulus, had he won the election, even bigger than the Dem proposal. So, as much as you would like to paint it that way, Trump has never been a fiscal conservative. He called himself the king of debt for a reason.

 

Then it would have resulted in a budget fight and a government shutdown, and once again Democrats would still be blaming Trump.

The President does not have complete control over the budget. It requires compromise.