Act now! Mortgage rates rise to nearly four-year high on inflation concerns
Freddie Mac says benchmark rate is highest since April 2014
Mortgage rates have climbed to the highest level in close to four years, according to data released Thursday.
The 30-year fixed-rate mortgage averaged 4.38% in the week ending Feb. 15, up from 4.32%, mortgage buyer Freddie Mac said.
A year ago, the benchmark mortgage averaged 4.15%.
The 15-year fixed-rate mortgage averaged 3.84%, up from 3.77%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.63%, up from 3.57%.
The backup in rates has occurred on concerns about rising inflation pressure, with the latest increase coming after a stronger-than-forecast gain in consumer prices.
“Inflation measures were broad-based, cementing expectations that the Federal Reserve will go forward with monetary tightening later this year,” said Len Kiefer, deputy chief economist.
Fellow mortgage buyer Fannie Mae said it’s upped its 30-year fixed rate mortgage forecast for the fourth quarter by 30 points to 4.4%.
“However, we don’t expect rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth. The ongoing inventory shortages should continue to constrain sales despite otherwise ripe home buying conditions,” said Doug Duncan, Fannie’s chief economist, in a statement.
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A huge sell-off in the bond market is about to make buying a home more expensive. Mortgage rates, which loosely follow the yield on the 10-year Treasury, have been rising for the past few weeks, but are seeing their biggest move higher Monday.
“Bottom line, rate sheets are going to be ugly this morning,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “Some lenders will be at 4.5 percent on their best-case-scenario 30-year fixed quotes.”
That is the highest rate since 2014.
Mortgage rates jump to highest in 4 years, an ominous sign for spring housing
- Mortgage rates are surging due to the jump in U.S. bond yields.
- “Some lenders will be at 4.5 percent,” says Matthew Graham of Mortgage News Daily.
- Higher mortgage rates, combined with higher home prices, will make this spring housing market even more challenging.