The average interest rate for a 30-year mortgage (housing loan) in the USA reached the highest since 2006, at 6.75 percent.

While the US Federal Reserve (Fed) continued to increase interest rates in the face of high inflation, the increase in borrowing costs continued to affect the housing market.

According to Mortgage Banks Association (MBA) data, mortgage applications decreased by 14.2 percent in the week ending September 30 compared to the previous week.

The country’s average interest rate for a 30-year mortgage increased from 6.52 percent to 6.75 percent. Thus, the said interest rate rose to the highest level since 2006.

In the same period, the average interest rate for a 15-year mortgage increased from 5.7 percent to 5.96 percent.

Joel Kan, MBA Vice President of Economics and Industry Forecast, stated that mortgage rates continued to rise last week, and mortgage applications fell to the lowest level since 1997.

Pointing out that the current rate has doubled compared to last year, Kan noted that it has increased by 130 basis points in the previous seven weeks.

Stating that Hurricane Ian also influenced the decline in mortgage applications, Kan reported that applications decreased by 31 percent in Florida, which was hit by the hurricane.