US mortgage rates rose more than 3%; 30-year-olds at 3.02%

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WASHINGTON (AP) – Mortgage rates topped the 3% mark this week for the first time in 10 weeks as the economic recovery from the pandemic recession continues and inflation remains high.

Mortgage buyer Freddie Mac said the average on a key 30-year home loan rose to 3.02% from 2.93% last week. For comparison, a year ago the rate was 3.13%.

The rate on a 15-year loan, a popular mortgage refinancing option among homeowners, jumped to 2.34% from 2.24% last week.

Freddie Mac economists expect mortgage rates to rise gradually in the second half of the year.

A government report on Friday showed that consumer spending was unchanged in May, but inflation saw significant gains, with prices excluding food and energy surging by the largest amount in nearly three decades.

Last week, the Federal Reserve signaled it could act earlier than previously planned to begin cutting back on its low interest rate policy, which fueled a quick recovery from the recession but also coincided with rising inflation. Fed Chairman Jay Powell said the surges in inflation in recent months are likely to be temporary.

In other economic news, the government said Thursday that the number of Americans who applied for unemployment benefits last week fell 7,000 to 411,000, signaling fewer layoffs and improving labor market conditions. The number of weekly jobless claims has been steadily declining this year from around 900,000 in January.

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