During its upcoming meeting, it's expected the Federal Reserve will keep interest rates as they are. But, despite the pause in rate hikes, consumers will continue to face high borrowing costs, CNBC reports. Mortgage rates have risen to 8%, which is affecting housing affordability, and because adjustable-rate mortgages and home equity lines of credit are pegged to the prime rate their rates have surged as well.
In addition to elevated housing costs, auto loan rates are over 7%, which means higher payments for car buyers, too. Meanwhile, federal student loan rates have risen to 5.5%, affecting borrowers as interest accrues again. That shift back to payments has proven challenging for many with existing debt.
“Rates have risen two full percentage points in 2023 alone,” said Sam Khater, Freddie Mac’s chief economist. “Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.”
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