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Housing: Mortgage rates rise to 6.7%, highest level since 2007

Yahoo Finance Live’s Julie Hyman discusses the 30-year mortgage rate hitting a new high since 2007, according to Freddie Mac.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: We got to get another check on markets right now because we are blasting through the intraday lows on the Dow and the S&P 500, getting a little closer there on the NASDAQ as losses accelerate, now off 3.3% for the NASDAQ composite, 2 and 1/2% for the Dow-- 2 and 1/2% for the S&P, 2% for the Dow.

The latest catalyst seems to be mortgage data just out at the top of the hour from Freddie Mac. 6.7% is what you're looking at now for a 30-year mortgage, according to Freddie Mac. That is the highest since July of 2007. Let's put this in perspective, folks. 6.7% is what people are paying, on average, for a 30-year mortgage right now. A year earlier, that number was less than half at 3.01%.

So how does this translate in real terms? "The Wall Street Journal" citing a bank rate mortgage calculator to really bring it home for you. If you had bought a $500,000 house a year ago and put 20% down, you would be paying $208,000 in interest over the next 30 years. Now, if you buy that exact same house, you are going to be paying $529,000 in interest over the next 30 years. $208 versus $529,000 because of that increase we have seen in mortgage rates.

So when we talk about the effect that these higher mortgage rates have on the economy, obviously the big knock-on effect that they have on spending, not just on a house but on everything else, if you do, in fact, go out and buy that house, this is a big deal and the highest that we've seen in a long time. So explains what we see in terms of market reaction as well.

Let's get to some other business headlines now that we are watching. Gunmaker Smith & Wesson being sued by families of victims in the Highland Park, Illinois, mass shooting on the 4th of July this year. That attack, in which a shooter fired more than 70 rounds from a rooftop into a crowd, killed seven and injured dozens.

The suit now alleges the gunmaker used deceptive and unfair marketing to target, quote, "risk-seeking" and, quote, "disturbed young men." The move comes after Remington settled a suit with victims of the Sandy Hook Elementary School shooting for $73 million earlier this year.

Amazon says it's raising hourly wages but only by $1 and only for two employee groups. Workers in its customer fulfillment and transportation groups will see wages rise to $16 an hour. That's up from $15, which remains the company's minimum starting wage for all other employees.

Amazon claims the move will increase the company's spending by almost $1 billion. Amazon remains one of the largest private employers in the US. It's currently one of several companies facing unionization drives, including Chipotle, Apple, and Starbucks.

And moving out, oil giant Chevron has sold its California headquarters. It'll move into a smaller office space nearby as it both downsizes its physical space and shifts more employees to Texas. Chevron, which has a long history in California stretching back to its predecessor, the Pacific Coast Oil Company. Chevron says its headquarters will remain in California, that's according to "The Wall Street Journal." The move follows several other large companies that have shifted operations to Texas, including Caterpillar and Tesla.