US Mortgage Rates Rise to Highest Level Since 2006

Facts

US mortgage interest rates have, on average, increased to their highest level in 16 years, according to data by the Mortgage Bankers Association (MBA) released on Wednesday, with rates more than doubling since January 2022 as the Federal Reserve increases interest rates amid rising inflation.
30-year mortgage rates are now over 7%, up from around 3% 10 months ago, according to Mortgage News Daily.
Mortgage applications to purchase homes have dropped 39% since last year, with a 2% drop occurring in the week ending Oct. 7.
According to federal mortgage financer Fannie Mae's September survey, only 19% of people say it’s a good time to buy a home, 75% say it's a bad time to buy a home, and 60% say it's a good time to sell.
The higher overall rates have crushed demand for refinancing, too. Refinancing applications are down 2% on the week and 86% on the year, leaving barely 150k people able to benefit from a refinance due to their current rates being lower than what could be offered.

Narrative A, as provided by MSN. Increasing rates is a painful but necessary measure to cool the housing market and ensure that prices align with rents and other market fundamentals. There was a significant imbalance between supply and demand, and housing prices were going up unsustainably fast, which is why the Fed has been right to step in until they're brought down to normal.
Narrative B, as provided by Market Watch. Contrary to the hopes of the Fed, high mortgage rates may become the new normal that home buyers and homeowners will have to adapt to and accept over time. It’s unlikely that a housing recession will destabilize the economy — as it did in 2008 — but people will have to pay more out of their income.