U.S. mortgage interest rates reach 6.25%, highest since October 2008

U.S. mortgage interest rates reach 6.25%, highest since October 2008

The average interest rate on a 30-year fixed-rate mortgage rose to 6.25%, the highest since October 2008.

Increasing mortgage rates are significantly weighing on the interest-rate-sensitive housing sector.

It has made the housing market even more unaffordable, forcing potential buyers to pause their purchasing plans.

This development has come as Federal Reserve pushes on with lifting borrowing costs to counter high inflation.

The central bank announced a massive interest hike of 0.75% for a third straight time.

With this, the cost of debt for credit cards, vehicle financing and other loans have increased substantially.

There has been a fifth-straight increase in federal funds rate between 3% and 3.25%, highest since 2008.

The central bank's increase in key interest rates is aimed at discouraging spending.