Posted 10/19/2023, 5:43:22 AM
Mortgage Rates Hit 8% for First Time in Two Decades as Fed Battles Inflation
- US mortgage rates hit two-decade high of 8%
- Rates pushed higher by Federal Reserve interest rate hikes to curb inflation
- Mortgage rates up half a percentage point in two weeks
- Fed raising rates most common strategy to slow rising prices
- Mortgage rates also affected by swings in demand for US Treasuries
- Political chaos in Washington raised doubts about appetite for US debt
- Prices of Treasuries fell, yields rose, hitting mortgage rates
- Markets increasingly reacting to events affecting government borrowing
- Housing market already hit by higher mortgage rates
- Home sales down 15% in August as buyers dropped out
- But house prices up nearly 4% as demand still outpaces supply
- Analysts say Fed not expected to raise rates much further
- Inflation slowed significantly since last year
- But strong economic data raised fears Fed may need to do more
