Mortgage rate surge to highest in two decades

Mortgage rates rose to their highest level in 21 years Thursday, Aug. 17, according to Freddie Mac, also known as Federal Home Loan Mortgage Corp.

The 30-year fixed rate mortgage averaged 7.09%, up from 6.96% a week earlier.

Last week's average is the highest the long-term fixed mortgage has been since April 2002, when it was 7.12%.

Mortgage rates have been on the increase since the Federal Reserve began its historic rise in interest rates in an effort to wrestle inflation to a maximum 2% level.

Buying a home is now more expensive because of the added cost of financing a mortgage.

"This is a difficult housing market," said Terry Baker, association executive for Southeast Missouri REALTORS. "For buyers and sellers seeking to make a move in this market, hiring a professional to advise them through the process is a wise move."

National Association of REALTORS said the combination of low inventory of available homes for sale and high costs has resulted in home sales about 20% lower than a year ago.

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