Expectations of the Federal Reserve's interest rate cut have cooled, and US mortgage interest rates have risen sharply to a new high since August

The Zhitong Finance App learned that US mortgage interest rates rose sharply for the second week in a row, reaching the highest level since the beginning of August, while also causing a sharp decline in home purchases and refinancing activities.

According to data released by the American Mortgage Bankers Association (MBA) on Wednesday, the contract interest rate for 30-year fixed-rate mortgages rose 16 basis points to 6.52% in the week ending October 11. Over the past two weeks, this interest rate climbed 38 basis points, the highest level in any comparable period since February 2023.

The 15-year fixed interest rate jumped 23 basis points to 5.94%, the biggest increase since May.

Mortgage interest rates, which track US Treasury yields, have been rising recently as reports of strong employment growth and sticky inflation have prompted traders to reduce their bets on sharp interest rate cuts.

Since the release of these data, Federal Reserve officials have supported a more gradual approach to reducing borrowing costs after cutting interest rates sharply in September.

Rising mortgage interest rates are shattering hopes for a rapid recovery in the housing market, which has been hit by both high borrowing costs and asking prices.

The MBA home buying index fell 7.2%, the biggest drop since mid-February, while the refinancing index fell more than 26%, the biggest weekly decline since March 2020.