This summer’s surge in longer-term, U.S. Treasury yields has rendered yet another grim milestone for homeowners and lenders alike- the highest contract rate on a 30-year fixed mortgage since November 2000. According to the Mortgage Bankers Association, this rate jumped to 7.53% by September 29th, as ‘higher for longer’ by the FOMC becomes more likely and rapidly deteriorating fiscal position drove 10-year U.S. Treasury yields higher by 46 basis points during September. The rise in financing costs continued into October given this week’s leg up in longer term U.S. Treasury yields, a key driver of mortgage rates, with 30-year fixed rate mortgage rates surpassing 7.70% earlier this week according to Mortgage News Daily. Indeed, soaring mortgage rates and resilient, near-record home prices have hastened one of the least affordable home buying environments in decades, with The National Association of Realtors housing affordability index coming in at 87.8 by the end of July, matching the lowest level in data back to 1989. To put this in context, a level of 100 means a family earning the national median income qualifies for a mortgage at the median home price, levels not seen since the beginning of the year.
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