Mortgage interest rates reach highest level since 2002

Oct. 27 (UPI) -- Average mortgage interest rates have surpassed 7%, rising to their highest level in 20 years, the Federal Home Loan Mortgage Corp. said Thursday.

Significant interest rate increases from the Federal Reserve, aimed at curbing inflation, are affecting the housing market. As inflation endures, customers are seeing higher costs at every turn, causing further declines in customer confidence this month," Freddie Mac's chief economist, Sam Khatar, said in a statement.

The increase has led to stagnation in the housing market, and "many potential homebuyers are choosing to wait and see where the housing market ends up, pushing demand and home prices further downward," Khatar said.

Home price increases also have seen a significant slowdown, with a 13% increase for the year that ended in August compared to the preceding 12 months, which increased 15.6%, according to the S&P CoreLogic Case-Schiller National Home Price Index.

The 2.6 percentage-point decline between the two yearlong periods is the sharpest in the history of the index, company officials said.

Th national median mortgage payment increased to $1,941 in September from $1,844 in September, according to a report released Thursday by the Mortgage Bankers Association.

The increase in mortgage interest rates raises concerns that minority households could be disproportionately affected.

"With 7% mortgage rates, only 15% of Black households can currently afford to buy the typical home compared to 30% of White households," National Association of Realtors senior economist Nadia Evangelou said in a statement.