The average rate on 30-year mortgages rose to 6.02 percent this week from 5.78 percent the previous week, according to Bankrate’s national survey of large lenders.
It was the highest reading for mortgage rates since November 2008, and further evidence of the end of the decade-long period of low rates that followed the Great Recession. The Federal Reserve has been moving aggressively to control inflation, and its second consecutive rate hike of three-quarters of a percentage point would seem to create upward longer-term pressure on mortgage rates.
“Mortgage rates are moving above 6 percent as the Fed’s message of ‘higher rates for longer’ is sinking in,” says Greg McBride, Bankrate’s chief financial analyst.
The Fed doesn’t directly control fixed mortgage rates; the most pertinent number is the 10-year Treasury yield, which has bounced around in recent weeks.
A year ago, the benchmark 30-year fixed-rate mortgage was 3.05 percent. Four weeks ago, the rate was 5.59 percent. The 30-year fixed-rate average for this week is 2.99 percentage points higher than the 52-week low of 3.03 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.46 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.43 percent.
- The 15-year fixed-rate mortgage was 5.17 percent, up from 5.03 percent last week.
- The 5/6 adjustable-rate mortgage (ARM) ticked up to 5.12 percent from 5.08 percent a week ago.
- The 30-year fixed rate jumbo mortgage was 5.56 percent, up from 5.47 percent last week.
Where are mortgage rates deaded? Housing economists see rates rising, but the question is how much. “Rates will continue this march higher well into the future until inflation and debt spending are back under control,” says Derek Egeberg of Academy Mortgage in Yuma, Arizona.
Economists had expected rates to rise by the end of 2022, but the roller coaster ride in recent weeks has many forecasters wondering what comes next. As mortgage rates flirt with the 6 percent barrier, competition among homebuyers could ease further. It remains to be seen how home sales activity shakes out for the remainder of the year.
Article Source: Bankrate