Mortgage rates in the United States rose to 7.23%, the highest level in 22 years

Washington, DC
CNN
—

Mortgage rates in the US continued to rise this week, rising to their highest level since 2001.

The average 30-year fixed-rate mortgage was 7.23% in the week ending Aug. 24, up from 7.09% in the previous week, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed interest rate was 5.55%.

Sam Khater, chief economist at Freddie Mac, said persistent signs of economic strength are likely to keep mortgage rates flat or push them higher in the short term.

Interest rates have been above 6.5% since the end of May and have been rising since mid-July. Before last week’s rate, the last time rates were over 7% was in November last year when it reached 7.08%.

This week’s average interest rate is the highest on a 30-year fixed-rate mortgage since June 2001, when it was 7.24%.

Mortgage rates have soared during the Fed’s historic campaign to curb inflation, sending housing affordability down to its lowest level in several decades. It is more expensive to buy a home because of the additional cost of mortgage financing and higher home prices.

The inventory of existing homes has dropped dramatically as homeowners who were previously tied to lower rates are now reluctant to sell. The combination of low inventory and rising costs put pressure on potential homebuyers and drove down overall home sales.

This is a developing story and will be updated.