Rising Global Mortgage Rates
US and South Korean Mortgage Rates Surge to Multiyear Highs
Anonymous
Mortgage borrowing costs are rising in both South Korea and the United States, squeezing prospective homebuyers and slowing loan activity. In South Korea, the average rate on new mortgages reached 4.66% in August, its highest since late 2022, while rates on other household loans also increased; banks are tightening loan terms as mortgage balances continue to grow. In the United States, the 30-year fixed mortgage rate climbed to 7.30%, a near-three-year high, as purchase and refinancing applications fell and existing-home sales weakened. Separately, U.S. long-term Treasury yields have surged amid concerns about persistent inflation, federal borrowing and bond supply, adding pressure to broader borrowing costs.
Key Points
1
In South Korea, the share of newly issued fixed-rate mortgages rose to 35.3% from 31.9%, its first increase in 10 months, while variable-rate lending’s share declined.
2
South Korean corporate borrowing costs also rose: the average corporate lending rate increased to 4.30%, with rates for small and medium-sized businesses reaching 4.38%.
3
In the United States, the five-year adjustable-rate mortgage rate jumped 37 basis points to 6.47%, its highest level in more than two years; adjustable-rate loans accounted for 10.3% of applications, as borrowers responded to the roughly 80-basis-point gap with fixed rates.
4
U.S. existing-home inventory rose to 1.62 million properties in August, its first time above 1.6 million since November 2019; at the current sales pace, that represented 4.9 months of supply.
5
The U.S. 30-year Treasury yield briefly topped 5.6%, its highest level since June 2002. BondBloxx strategist JoAnne Bianco said investors’ concerns about inflation, fiscal deficits and Treasury supply meant “there needs to be more term premium.”
Sentiment
Mostly NegativeNEGATIVENEUTRALPOSITIVE
Publishers
14
Articles
77
Reach
91
A
AnonymousAuthor
