Average long-term U.S. mortgage rates jumped again last week, approaching levels not seen since 2019.
The average rate on a 30-year loan rose last week to 3.92% from 3.69% the previous week, mortgage buyer Freddie Mac reported Thursday. A year ago, the long-term rate was 2.81%.
The last time the 30-year rate was higher was in May 2019, when it hit 3.99%.
The average rate on 15-year fixed-rate mortgages, popular among those refinancing their homes, rose to 3.15% from 2.93% a week earlier. It was 2.21% a year ago. It last exceeded 3% in March 2020, just as the pandemic was breaking out in the United States
The Federal Reserve has signaled it will begin the first in a series of interest rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but are also contributing to rising levels of unemployment. inflation not seen since the early 1980s.
The Labor Department reported last week that consumer prices jumped 7.5% last month from 12 months earlier, the biggest year-over-year increase since February 1982. Rising costs for almost everything weighed on consumers, offsetting wage increases and bolstering the Federal Reserve’s decision. start raising borrowing rates across the economy.
The price of a new home has jumped about 14% over the past year and up to 30% in some cities. Housing was scarce even before the pandemic, and rising prices and rising interest rates will make it even harder for homebuyers.
“As house rates and prices rise, affordability has become a significant hurdle for potential buyers, especially as inflation threatens to put a strain on consumer budgets,” Sam said. Khater, chief economist at Freddie Mac.