Something borrowed: Mortgage rates for would-be borrowers are hitting 20-year highs

8/20/23 8:00PM

How high can you go?

‍The average US mortgage rate has surged to 7.1% — a level it has not reached for over two decades, according to data published by Freddie Mac last week — as sustained interest rate rises from the Federal Reserve continue to filter through into the mortgage market.

‍Locked-in

‍The reverberations of these high mortgage payments, coupled with the sizable contingent of present homeowners who secured mortgages during the era of ultra-low interest rates, have cast a shadow over the housing market. Understandably, everyone already holding favorable fixed rates are reluctant to re-enter the mortgage market, leaving aspiring buyers with limited options. The consequence? A nearly 19% plunge in year-over-year sales of existing homes in June, converging to make the most challenging housing affordability conditions in the last four decades, per Bloomberg.

Hyunsoo Rim

appy birthday

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.