Mortgage rates hit 6 percent for first time since 2008

The average interest rate on a 30-year fixed-rate mortgage rose above 6 percent for the first time since the financial crisis, according to federal data released Thursday.

The average mortgage rate for the benchmark home loan rose to 6.02 percent as of Thursday, according to Freddie Mac, up 0.13 percentage points from last week and 3.16 percentage points above its level a year ago. It’s the first time the 30-year fixed rate mortgage rate was above 6 percent since the week of Nov. 20, 2008. 

Mortgage rates have risen steadily over the past year as the Federal Reserve ramps up interest rates across the economy to fight inflation. 

The Fed is aiming to slow economic activity — including home sales and home price growth — to bring consumer and business spending down to a level that won’t spur inflation. The central bank has hiked its baseline interest rate range four times since March by a total of 2.25 percentage points and is certain to hike rates again next week.

“Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week, exceeding six percent for the first time since late 2008,” said Sam Khater, Freddie Mac’s chief economist. 

While the Fed has long been on track to raise interest rates next week, an unexpected August increase in inflation stoked concerns the bank may need to accelerate its planned series of rate hikes. The consumer price index, a closely watched gauge of inflation, rose 0.1 percent in August despite most economists projecting a decrease in prices last month.