Photo: Bill Pugliano / Getty Images
Mortgage rates exceeded 4% this week and reached their highest level since May 1200: the fixed-rate mortgage at 30 years averaged 4.16% in the week ending 17 in March, compared to 3.85% of the previous week, according to Freddie Mac.
This is a stark contrast to last year’s record low mortgage rates, of less than 3%. A year ago, the rate at 30 years stood at 3.09%.
For its part, this week’s report indicates that the fixed rate at 15 years, a common refinancing option, also increased by an average of 3.39% from 3.09% from last week.
The increases mean that mortgage rates will likely continue to rise during the year, after the Federal Reserve increased the key rate , which had been kept close to zero since the start of the pandemic of covid-30, in a quarter point. And the central bank signaled potentially up to seven additional rate hikes this year.
“That the Federal Reserve raise short-term rates and signal new increases means mortgage rates should continue to rise over the course of the year,” said Sam Khater, chief economist at Freddie Mac.
Rates have risen markedly in recent weeks as shaken markets responded to inflation concerns that rose further after the United States banned oil imports from Russia after its invasion of Ukraine.
Specialists consulted by Yahoo! Finance said Wednesday’s move by the Federal Reserve to raise short-term interest rates by a quarter point is unlikely to reduce inflation any time soon.
Some of the reasons they gave are the current problems in the supply chain and the effect of higher fuel costs on consumer prices.
The ongoing uncertainty over the war in Ukraine is also helping to push Treasury yields up to 10 years, which tend to follow fixed mortgage rates.
Rising inflation and uncertainty in Ukraine are also affecting rates.
“Investors are reacting to the deepening of the war in Ukraine and expect further supply chain disruptions to add additional pressure on consumer prices,” George Ratiu, manager of economic research at Realtor.com.
Home prices increased by 15 % during the last year and up to 30 % in some cities. Homes available for sale have been in short supply even before the pandemic began two years ago.
Now, higher prices and rising loan rates will make it even more difficult for consumers to purchase a home this spring.
The government reported on Tuesday that wholesale inflation in the US skyrocketed by 10% last month compared to the previous year, another sign that inflationary pressures continue to be intense at all levels of the economy.
You may also like:
– Bank of America report ensures that it is “the worst time in history” to be able to buy a house in the US. UU.
– Rent in the United States: in these cities it is better buy a house than rent it
– Cost of second-hand housing I know is on the rise in the US