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Mortgage rates see highest weekly increase since the 1980s

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Mortgage rates have risen due to the highest weekly rise since the 1980s, according to Freddie Mac. ((((iStock).

Mortgage rates soared last week, with one loan term rising to a level not seen since 1987. Latest data From Freddie Mac.

According to Freddie Mac’s Primary Mortgage Market Research, 30-year fixed rate mortgages rose to 5.78%, up from 5.23% last week and 2.93% last year. The length of other mortgages has also increased — mortgages in 2015 rose to 4.81%, up from 4.38% last week and 2.24% last year. In addition, the five-year Treasury indexed hybrid floating rate mortgage (ARM) rose to 4.12% last week, up from 2.52% last year to 4.33%.

“The 30-year fixed rate mortgage has risen by more than 0.5 percentage points, causing mortgage rates to skyrocket, the largest week-long rise in the survey since 1987,” said Sam Carter, chief economist at Freddie Mac. Said. “These higher rates are the result of changing expectations about inflation and the direction of monetary policy.

“Rising mortgage rates will help ease the blazing pace of housing activity that has experienced a pandemic break, ultimately leading to a more balanced housing market,” Carter said.

If you want to buy a home or refinance your mortgage in the midst of rising interest rates today, using the market to compare different lenders will help you get the highest interest rates available.You can do it Visit Credible to find personalized interest rates Without affecting your credit score.

Rising inflation pushes interest rates up

To fight rising inflation Federal Reserve announced Last week, we decided to raise interest rates by 75 basis points. This is the largest rate hike since 1994.Prior to that, the Federal Reserve Board Interest rate hike 50 basis points in May and 25 basis points in March.When More rate hikes Most likely from the central bank.

“Rising mortgage rates continue to put pressure on the home market, further pushing up the cost of owning a home,” said Hannah Jones, an economic research analyst at Realtor.com last week. “Freddie Mac’s tracked interest rates remain in the 5’s, but other mortgage surveys show interest rates above 6% earlier this week, in response to inflation data that rose to 8.6% in May. I did.

“This is the highest level in 40 years and the biggest contributors are food, shelter and petrol,” continued Jones. “In the grocery store, pumps, and both the retail and rental markets, American consumers had little reassurance.

“The average list price of US homes was $ 447,000 in May, up 18 percent from May 2021, and mortgage rates have risen by more than 2 percentage points over the same time frame,” she concludes. “This means that it will cost about 65%, or $ 820 a month, to finance 80% of the current median US home prices since May 2021.”

If you are interested in taking advantage of interest rates before they get high, you can consider refinancing your mortgage to save money on your monthly payments. Visit Credible to compare multiple mortgage lenders at once And find the one with the best rate for you.

Thousands can benefit from mortgage refinancing, data show

While mortgage rates are rising, the number of homeowners who can benefit from refinancing is declining, but data show that there are still many who continue to be a viable option. increase.

After the rate hike last week, the number of quality refinancing candidates has dropped to 472,000, according to Black Knight data. This is the minimum number of homeowners who can benefit from refinancing since 2000. Interest rates are rising, but changing loan terms may reduce monthly payments.

“Refinancing will extend the term again to 30 years, resulting in excess monthly savings,” said Black Knight. “This reflects the impact of extended-term savings over current interest rate savings, explaining why the population is record low, but savings are not.”

According to the data, the average savings for the beneficiaries was about $ 309 per month. And for more than half of those who can benefit, their savings will be between $ 100 and $ 300 per month.

Black Knight defines refinancing candidates as 30-year mortgage holders with a loan-to-value ratio of up to 80% and a credit score of 720 or higher. Refinancing can reduce these mortgages by at least 0.75% from the current initial lien rate.

If you’re interested in seeing if refinancing can help you save on your monthly mortgage payments, you can: Contact Credible to talk to a mortgage expert Check if this is the right option for you.

I have a financial question, but don’t know who to ask? Send an email to a trusted money expert at [email protected] And your question may be answered by Credible in our Money Expert column.

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