Economic Report: Mortgage rates surge to the highest level since April 2002. ‘The next several months will undoubtedly be important for the economy and the housing market.’

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The numbers: U.S. mortgage rates have resumed their journey upwards, hitting a 20-year high.

The 30-year fixed-rate mortgage averaged 6.92% as of October 13, according to data released by Freddie Mac FMCC, -3.40% on Thursday. 

The 30-year was last at this level in April 2002.

That’s up 26 basis points from the previous week — one basis point is equal to one hundredth of a percentage point. 

Last week, the 30-year was at 6.66%. Last year, the 30-year was averaging at 3.05%

It’s worth noting that Mortgage News Daily, which follows day-to-day movement in mortgage rates, is noting that the 30-year is at 7.05%.

The average rate on the 15-year mortgage rose to 6.09%. 

“Rates resumed their record-setting climb this week,” Sam Khater, chief economist at Freddie Mac, said in a statement.

There’s a “tale of two economies in the data,” Khater added, between a strong job market and wage growth, amidst inflation and recession concerns — and housing affordability worsening. The latter are “driving housing demand down precipitously,” he said.

So “the next several months will undoubtedly be important for the economy and the housing market,” he stressed.

The adjustable-rate mortgage averaged 5.81%, up from the prior week. 

Put off by the high rates, buyers’ apprehension has pushed mortgage applications down to the lowest since 1999, the Mortgage Bankers Association said.

The yield on the 10-year Treasury note TMUBMUSD10Y, 4.023% rose above 4% in morning trading on Thursday, suggesting that rates may likely move up further.

Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

This article was originally published by Marketwatch.com. Read the original article here.

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