Mortgage rates exceeded 3% for the first time in 2 months

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According to the latest weekly Freddie Mac, mortgage rates topped 3% for the first time in two months. Initial research of the mortgage market

Economists expect rates to continue to rise amid rising inflation and signals from officials that The Federal Reserve may raise interest rates earlier than previously thought.

“Mortgage rates have surpassed three percent for the first time in ten weeks,” said Sam Hather, chief economist at Freddie Mac. “As the economy progresses and inflation remains high, we expect rates to continue to gradually rise in the second half of the year. For those homeowners who have not refinanced yet – and there are many borrowers who could benefit from it – now is the time. “

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The average rate on a 30-year fixed-rate mortgage was 3.02%, up nine basis points from 2.93% last week. 15-year mortgage rates averaged 2.34%, 10 basis points higher than the 2.24% average from the previous week.

Meanwhile, the average rate for the 5-year Treasury-indexed hybrid regulated rate rose only marginally, from 2.52% to 2.53%.

The news comes on the heels of Fed officials proposing to raise interest rates earlier than previously anticipated for 2024, amid surges in growth and inflation as the US economy recovers from the fallout. coronavirus pandemic.

At the end of 2020, a dozen Fed policymakers suggested that interest rates at the crisis level should remain in place until 2024. But seven officials attending the central bank’s policy meeting last week expressed support for raising the overnight interest rate above its current level. – zero level sometime next year.

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The rise in mortgage rates comes as property prices hit record highs last month amid continuing home shortages across the country that began in 2020, but sales have declined in recent months. As many potential home buyers are tired of competing for the limited inventory available, higher mortgage rates could push them out of the market even further.

“Buyers are running out of steam,” said George Ratiu, senior economist at Realtor.com. MarketWatch… “Without additional supplies, favorable financing is just a chair on one leg trying to provide a shaky foundation for sustainable growth.”

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