He said the continued rise in mortgage rates was still showing signs of slowing. The Wall Street Journal.
The Freddie Mac Housing Finance said Thursday that the average interest rate on 30-year fixed-rate home loans rose 5.27% from 5.1% the previous week. This weekly number is the highest in nearly 13 years.
Thursday’s data began to rise rapidly at the start of the spring sales season. The average interest rate on America’s most popular mortgage was 3.22% in early January, up from 2.96% a year earlier. From January to April, interest rates rose at the fastest rate in three months since 1994.
On Wednesday, the Federal Reserve raised interest rates by half a percentage point to curb inflation. Chair Jerome Powell indicated that further increases of half a point in the breakout sessions in June and July may be warranted.
Freddy’s weekly average was recorded before the central bank’s announcement on Wednesday. Mortgage rates generally correlate closely with yields on 10-year US bonds, which generally rise in line with the Federal Reserve’s benchmark interest rate.
Higher interest rates can mean higher monthly payments for borrowers who become more creative in responding. Some buyers take back the loan to lower mortgage rates, prepay or increase self-sufficiency to reduce their monthly expenses. According to the Mortgage Bankers Association, the demand for floating rate mortgages has increased dramatically in recent months.
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