Homebuyers and owners in the US are experiencing similar pressures to their counterparts in the UK.

Figures this week show the 30-year fixed rate mortgage rose to 7.22% compared to 5.65% the previous year, according to data compiled by Mortgage News Daily.

The weekly Freddie Mac index reveals a similar trend reaching 6.81% compared to 5.7% for the same week in 2022. Both these figures represent year highs.

As is the case in the UK, the US Federal Reserve is expected to follow the BoE in raising rates even further this month.

According to a Redfin report mortgage rate increases have resulted in 82% of home buyers feeling tied in to their current low-mortgage rate with some sector watchers suggesting mortgage rates might need to slip to around 5% to free up more homes for sale.

“In addition to the limited inventory for buyers, the rising interest rates also pose a significant concern for those intending to purchase a home within the next year,” Redfin said in its report.

As with the US, the UK housing market is cooling and average rates for some products at least – for instance 10 year fixed 50% TLV deals – are heading close to 7% (6.83%) this week.

There is strong employment data from both the UK and US, but markedly weaker economic data on these shores.

Inflation is notably different too. In the US, fixed rate mortgages started climbing after Fed Chair Jerome Powell hinted that inflation would remain above 2% until 2025.

However, US inflation hovers around 4% with a core rate, which excludes volatile items such as food and energy, slowing to 5.3%, the lowest since November 2021.

This suggests the Federal Reserve might at least consider pausing its present cycle of monetary tightening. The UK currently has the same inflation target of 2% but with inflation currently at 8.7% the Bank of England may have significantly less wiggle room than the Fed.

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