US mortgage rates hit 21-year high as Fed action weighs on housing sector

Average interest rate on 30-year fixed-rate mortgage rose by 22 basis points to 7.16% last week

The average interest rate on the most popular US home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.

The average contract rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended 21 October while the MBA's Market Composite Index, a measure of mortgage loan application volume, fell 1.7% from a week earlier. Mortgage application activity is at its slowest pace since 1997.