US mortgage rates soar to 7.23%, a 22-year high

By Anna Bahney, CNN

Washington, DC (CNN) — US mortgage rates continued to surge this week, rising to their highest level since 2001.

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

Indications of ongoing economic strength will likely keep mortgage rates where they are or send them higher in the short term, said Sam Khater, Freddie Mac’s chief economist.

Rates have been above 6.5% since the end of May and have been climbing higher since mid-July. Prior to last week’s rate, the last time rates were over 7% was in November of last year when they hit 7.08%.

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

Mortgage rates have spiked during the Federal Reserve’s historic inflation-curbing campaign, sending home affordability to its lowest level in several decades. Buying a home is more expensive because of the added cost of financing the mortgage and rising home prices.

The inventory of existing homes has dramatically declined as homeowners who previously locked in lower rates are reluctant to sell. The combination of low inventory and high costs has squeezed would-be homebuyers and sent overall home sales way down.

This is a developing story and will be updated.

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