US mortgage rates jumped this week, climbing closer to 7%. The move follows last week’s rate hike from the Federal Reserve, and the downgrade this week by Fitch Ratings agency of US sovereign debt, and of Freddie Mac and Fannie Mae.
The 30-year fixed-rate mortgage averaged 6.90% in the week ending on August 3, up from 6.81% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 4.99%, the lowest rates have been in the last 12 months. “The combination of upbeat economic data and the U.S. government credit rating downgrade caused mortgage rates to rise this week,” said Sam Khater, Freddie Mac’s chief economist.
“Home buyers continue to feel the effects of tighter policy, which keeps a floor under mortgage rates.” While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Unraveling the link between the Federal Reserve Rate Hikes and Real-World Borrowing CostsIf you want to know where the economy is headed, don't watch the Fed. Track this interest rate instead. Anything above 4% is bad.
Read more »
Fitch downgrades US debt rating | CNN BusinessJUST IN: Credit rating agency Fitch has downgraded the US rating from its highest AAA rank to AA+
Read more »
Fitch downgrades US credit rating, citing mounting debt and political divisionsThe U.S. credit rating has been downgraded by Fitch Ratings, which cited an expected increase in government debt over the next three years and a “steady deterioration in standards of governance” over the past two decades.
Read more »
Fitch slashes U.S. credit ratings to AA+ from AAA, points to ‘erosion’ of governanceFitch Ratings cut its top U.S. credit rating to AA+ from AAA on Tuesday, pointing to “erosion” of governance and the nation’s expected fiscal deterioration...
Read more »
Fitch downgrades U.S. credit rating after debt ceiling crisisCredit agency Fitch Ratings downgraded the trustworthiness of the U.S. government Tuesday, saying successive standoffs over the nation’s debt ceiling and rising federal debt have cast doubt on the country's ability to meet all its payment obligations.
Read more »
Fitch downgrades U.S. after debt limit stalemateTuesday's downgrade drew an immediate rebuke from Treasury Secretary Janet Yellen.
Read more »