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US Cost Pressures Mount as Mortgage Rates and Oil Rise
People in the United States are facing higher costs for homes and energy.
The average interest rate on a common 30-year mortgage has risen above 7 percent.
That makes buying a home more expensive.
Oil prices also rose above $107 per barrel after attacks created worries about oil supplies.
Higher oil prices can make gasoline, diesel, and heating fuel more expensive.
Home sales have fallen, while home prices are still rising.
Inflation was reported at 3.4 percent in August.
Economists are concerned that expensive energy could make many other goods and services cost more.
The average 30-year US mortgage rate rose to 7.03% this week, up from 6.3% a year ago.
Brent crude traded near $107 a barrel after attacks linked to Iran-aligned Houthi militants raised supply concerns.
The 10-year US Treasury yield moved above 5%, increasing borrowing costs for consumers and businesses.
Existing-home sales fell 2% in August from July, while home prices rose 1.5% annually in June.
Economists warned that sustained energy-price increases could push up prices across the wider US economy.
- Who
- US homebuyers, homeowners, consumers, businesses, oil producers and traders, and parties involved in the Iran-linked conflict.
- What
- Mortgage rates rose above 7%, oil prices exceeded $107 a barrel, and energy and housing costs added pressure to the US economy.
- Where
- The economic effects are being felt in the United States, while oil-supply concerns center on the Persian Gulf, the Strait of Hormuz, Saudi Arabia, Yemen, and the Red Sea coast.
- When
- The mortgage-rate increase was reported this week; oil prices rose on Thursday, following attacks that began after February 28. The article also cites August inflation and home-sales data and June home-price data.
- Why
- Mortgage rates increased as Treasury yields rose and economic uncertainty grew; oil prices rose after attacks and concerns about disrupted shipments through the Persian Gulf.
Diplomatic Relief
Escalating Supply Risk
Oil-market outlook
Diplomatic Relief
Reports that Washington and Tehran might pursue a diplomatic path to restore exports through the Persian Gulf briefly eased oil prices.
Escalating Supply Risk
Fresh attacks by Iran-aligned Houthi militants in Yemen, including missile launches toward Saudi Arabia, renewed concerns about disrupted oil supplies and pushed prices higher.
Housing-market prospects
Diplomatic Relief
Mortgage rates fell below 6% in late February, raising hopes that the prolonged US housing slowdown could begin to recover.
Escalating Supply Risk
Rates later climbed above 7%, while home sales declined and high prices continued to make housing less affordable.
Key facts
- 30-year mortgage rate
- 7.03% this week, compared with 6.3% a year ago
- Brent crude
- Near $107 a barrel on Thursday, after earlier rising above $108
- US WTI crude
- Moved back above $95 a barrel
- 10-year Treasury yield
- Moved above 5%
- Inflation
- Consumer prices rose at an annual rate of 3.4% in August
- Existing-home sales
- Fell 2% in August from July, reaching their lowest level since June of the previous year
- Home prices
- Rose 1.5% annually in June, according to Cotality
- Strait of Hormuz traffic
- Ten commodity vessels crossed on Wednesday, below the 10-day moving average of 17
Sources
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