The average rate on a 30-year, fixed-rate loan rose a half point in just two weeks, likely due in part to the Fed’s decision to raise the key short-term interest rate.
WASHINGTON (AP) – Average long-term U.S. mortgage rates jumped again last week as the 30-year loan rate climbed to its highest level since January of 2019.
The increase comes after the Federal Reserve last week increased the key rate – which it had kept near zero since the pandemic recession struck two years ago – by more than a quarter point. The central bank has signaled potentially up to seven additional rate hikes this year.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan last week jumped to 4.42% from 4.16% last week. They’ve risen more than a half-point in the past two weeks. That’s a sharp contrast from last year’s record-low mortgage rates of under 3%. A year ago, the 30-year rate stood at 3.17%.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 3.63% from 3.39% last week.
Home prices are up about 15% over the past year and as much as 30% in some cities. Homes available for sale have been in short supply even before the pandemic started two years ago. Now higher prices and rising loan rates will make it even harder for would-be buyers as the spring homebuying season gets into gear.
The government reported last week that wholesale inflation in the U.S. shot up 10% last month from a year earlier – another sign that inflationary pressures remain intense at all levels of the economy. The report didn’t include price changes after Feb. 15, missing a spike in energy prices when Russia invaded Ukraine nine days later.
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