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Mortgage rates reach highest level in more than a decade

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According to Freddie Mac, 30-year fixed-rate mortgages averaged 5.11% for the week to April 21, up from 5% last week. This is the seventh straight week of increase, well above last year’s average of 2.97%.

According to Freddie Mac, the rate last reached this level at 5.21% in April 2010.

“Spring is usually the busiest season for home buying, but rising interest rates have caused some fluctuations in demand,” said Sam Carter, Freddie Mac’s chief economist. “It will continue to be the seller’s market, but buyers who continue to be interested in buying a home may find that the competition has moderated.”

Buyers struggled to get home before the prices went up too high. George Ratiu, economic research manager at Realtor.com, said people who couldn’t fix at low interest rates are aware that they can’t afford to pay much higher in today’s homes.It’s an existing home sale in March and is starting to show up in sales 2.7% down From February-Prices The best record ever..

With so few homes on the market, it’s hard to find more affordable entry-level homes. He said tight inventories and rising interest rates have also hit sales in the middle of the market.

“Housing demand because many first-time buyers cannot qualify for a home mortgage that meets their needs because the cost of financing a home is about 40% higher than it was a year ago. Is clearly cold, “says Latiu.

George Ratiu, economic research manager at Realtor.com, said this week’s rate hike follows the continued surge of the 10-year Treasury, which exceeded 2.8% for the first time since December 2018.

The Federal Reserve does not set interest rates on mortgages, but their actions indirectly affect them. US Treasuries, especially 10-year Treasuries, are the forerunners of fixed-rate mortgages. As yields on 10-year government bonds rise, so do mortgage yields.

And mortgage rates are expected to continue to rise, Ratiu said. The Federal Reserve is expected to act more aggressively to curb high inflation in the coming months, and central banks are widely expected to raise interest rates by 50 basis points at their next meeting in May. increase.

“The Fed’s cooling demand intent seems to be working, guiding the housing market towards a coveted balance,” Latiu said.

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