The steady climb in mortgage rates shows no sign of slowing down.
The average rate for a 30-year fixed-rate home loan rose to 5.27% from 5.1% a week earlier, housing-finance giant
Freddie Mac
said Thursday. That marked the weekly figure’s highest reading in nearly 13 years.
Thursday’s reading continued what has been a rapid surge as the busy spring selling season takes hold. The average rate on America’s most popular home loan was 3.22% in early January and 2.96% a year ago. From January to April, rates rose at their fastest three-month pace since 1994.
On Wednesday, the Federal Reserve raised interest rates by half a percentage point in a bid to curb inflation. Chairman
Jerome Powell
indicated that additional half-point increases could be warranted at meetings in June and July.
Freddie’s weekly average was recorded before the central bank’s Wednesday announcement. Mortgage rates are closely tied to the yield on the 10-year U.S. Treasury, which tends to rise in tandem with the Fed’s benchmark rate.
Higher rates can translate into larger monthly payments for borrowers, who are getting creative in response. Some buyers are paying fees to cut their mortgage rates or boosting their down payments to lower their monthly bills. Demand for adjustable-rate mortgages has risen sharply in recent months, according to the Mortgage Bankers Association.
MBA chief economist
Mike Fratantoni
said in a statement Wednesday that mortgage rates are likely to plateau near current levels. That should encourage more consumers to buy, but demand to refinance existing mortgages is unlikely to recover soon, the trade group said.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
