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Average 30-year mortgage rate climbs

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Average long-term mortgage rates in the US rose this week as inflation concerns continue to come to the fore and slowing economic growth weighs on the housing market.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate rose to 5.55% from last week’s 5.13%. At this time last year, this rate he was 2.87%.

The average interest rate for 15-year fixed-rate mortgages, popular with those looking to refinance their mortgage, jumped to 4.85% from 4.55% last week.

Rapidly rising interest rates, which add hundreds of dollars to monthly mortgage payments, have sidelined many potential homebuyers this year, cooling the once-hot housing market.

The National Association of Realtors said last week that July sales of existing homes fell for the sixth month in a row. This is due to the slow but still steady rise in mortgage rates and house prices.

The US economy contracted at an annualized rate of 0.6% from April to June, the government said on Thursday, an improvement from initial estimates. He has recorded a second straight quarter of economic contraction meeting one of the unofficial signs of a recession. But most economists say they don’t believe the economy is in or on the brink of a recession, given the US job market remains strong.

To contain the worst inflation the US has endured in 40 years, the Federal Reserve (Fed) has embarked on a series of four rate hikes this year, the fastest since the early 1980s.

Inflation concerns are top of mind as Fed officials and leading economists meet at their annual symposium in Jackson Hole, Wyoming, this week to discuss challenges to the global economy. Fed Chairman Jerome Powell’s speech on Friday could indicate that the central bank may raise interest rates in the coming months.

Mortgage rates don’t necessarily reflect Fed rate hikes. They tend to track his 10-year Treasury yield, which is influenced by a variety of factors, including investors’ expectations of future inflation and global demand for U.S. Treasuries.

Recently, accelerating inflation and US economic growth have caused US 10-year Treasury bond yields to rise sharply.

— Associated Press

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