Mortgage rates jump to over 7% again

Nov. 10 (UPI) -- Mortgage rates jumped past 7% this week as confidence in the housing market hits an all-time low.

The rate on the average 30-year fixed mortgage increased to 7.08% from 6.95% the week prior, according to Freddie Mac. Rates are now 4 percentage points higher than at the beginning of the year.

Mortgage rates have been hovering around 7% since first surpassing the mark at the end of October.

Fannie Mae said that confidence in the housing market decreased in October, with the Home Purchase Sentiment Index falling to 56.7, its lowest rating since the index began in 2011. Only 16% of respondents said that now is a good time to buy a home, while the percentage of those who believe now is a good time to sell a home dropped to 51.

"For homebuyers, conditions are pretty adverse," Keith Gumbinger, vice president of HSH.com told Yahoo Money. "Rates are likely closer to cycle higher than not, but what happens largely depends on whether inflation starts a meaningful downturn toward the Fed's 2% goal, whether the economy starts to slow significantly and whether the labor market starts to loosen."

As a result of the rate increases, monthly payments have skyrocketed. According to CNN, a typical homebuyer with a 20% down payment would have been looking at a $1,187 monthly payment last year. However, now with the 7% rate, a typical buyer is facing a $2,065 monthly payment. That is $878 more a month.

According to the Mortgage Bankers Association, last week's mortgage applications ticked up slightly for the first time in six weeks.

"The desire for homeownership is strong," said Bob Broeksmit, president and CEO of the MBA. "Many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook."

Inflation may be cooling, according to the most recent data from the U.S. Bureau of Labor Statistics, which reported Thursday that the Consumer Price Index was up 7.7% in October compared with the previous years, marking its lowest year-over-year increase since January. CPI was up 8.2% in September.