Mortgage rush underway as rates set to move even higher
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People interested in buying a house and getting a mortgage played a version of beat the clock ahead of the anticipated interest rate increase coming from the Federal Reserve on Wednesday afternoon.
The Fed is expected to sharply raise its key short-term rate – a third straight three-quarter-point hike is likely to be announced – as its previous rate hikes are being felt by households across the economy.
The Fed's latest move is expected to raise its benchmark rate to a range of 3% to 3.25%, the highest level in 14 years.
"Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation – another sizable short-term rate hike, said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. "Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25 percent – the highest since October 2008."
Ahead of the Fed's move, overall demand for a mortgage application rose 3.8% compared with the prior week, according to the weekly survey from the Mortgage Banker's Association.
FED LIKELY TO DELIVER MORE ECONOMIC 'PAIN' WITH ANOTHER SIGNIFICANT INTEREST RATE HIKE