A recent study has shown that the average long-term U.S. mortgage rates had their biggest one-week jump in 35 years.
On Thursday, mortgage buyer Freddie Mac reported that the 30-year rate climbed from 5.23% last week to 5.78% this week, the highest its been since November of 2008 during the housing crisis.
In view of the data, the Federal Reserve raised its key rate by three-quarters of a point this week to tame high inflation.
According to reports, Wednesday’s rate hike by the Fed was its biggest in a single action since 1994.
The Mortgage Bankers Association said the quick jump in rates and a sharp increase in home prices had pushed potential homebuyers out of the market.
They also said the mortgage applications are down more than 15% from last year, and refinancings are down more than 70%.
Moreover, it was also reported that higher borrowing rates appear to be slowing the housing market, a crucial part of the economy.