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Mortgage interest rates today, October 26 | Update of fixed and variable rate (ARM) for housing market

The Fed has upped interest rates in a bid to tackle rampant high inflation, but home owners are feeling the pain of increased monthly mortgage payments.

Will this be a good year to buy a home?

Mortgage costs have increased as the Federal Reserve has been forced to use interest rate hikes to bring inflation under control. The central bank is attempting to cool the economy by making borrowing less profitable, but there is now real concern that prospective homeowners may struggle to make the neccessary repayments.

As inflation in the United States has soared over the past 12 months, the Federal Reserve has chosen to hike interest rates on four separate occassions to stop people and businesses spending.

These interest rates are having a knock-on effect for homeowners as mortgage rates are directly affected by changing interest rates. With another rate rise set for November expect further increases in your mortgage payments.

The average mortgage rates for Wednesday, 26 October 2022 are as follows:

  • 30-year fixed mortgage: 7.163%
  • 20-year fixed mortgage: 6.798%
  • 15-year fixed mortgage: 6.252%
  • 10-year fixed mortgage: 6.380%
  • 5-year adjustable rate mortgage: 6.110%

The covid-19 pandemic wrought chaos with household finances and the uncertainty that it brought sent interest rates tumbling. In January 2021 the average rate for a 30-year fixed mortgage in the US slumped to 2.65%, the lowest in years. A far cry from rates today.

New mortgages fall as interest rates discourage prospective buyers

In the last week of September the Mortgage Bankers Association found that the total volume of mortgage applications had fallen by 14.2%, when compared to the previous seven days. This put it at the lowest seasonal-adjusted level since 1997, at a time when mortgage rates were at their highest in nearly 15 years.

The amount of stock remaining on the housing market for more than 30 days has risen dramatically too, with many buyers looking to wait until rates have fallen before committing to a mortgage.

Related stories

For much of the past 15 years home buyers in the United States have been able to rely on consistently low mortgage rates, making first time home ownership more achievable. However the recent rise in mortgage rates has put off many prospective buyers and caused a slow-down in the market more broadly.

ABC News reports that a buyer looking for a mortgage on a $500,000 home could expect to pay roughly $900 more per month thean would have been required at the same point in 2021.


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