The 30-year fixed-rate mortgage averaged 5.23 percent in the week ending June 9, up from 5.09 percent the previous week, according to Freddie Mac. The percentage remains well above the average of 2.96% of that time last year.
“After some movement over the past few weeks, mortgage rates have risen again amid heightened economic activity and inflowing inflation,” said Sam Hatter, Freddie Mac’s chief economist.
Interest rates rose in anticipation of inflation on Friday and reflected the recovery of the 10-year finance ministry, which reached 3% in the middle of the week, said George Ratiu, senior economist at Realtor.com and manager of economic research.
“Investors are looking at the consumer price index, expecting to see continued gains, but at a slower pace,” he said, adding that the data would be an important measure for the Federal Reserve at its meeting next week.
The Fed is expected to raise interest rates again at its next policy meeting. Mortgage rates tend to follow 10-year US government bonds. But interest rates are indirectly affected by the Fed’s actions on inflation. As investors see or expect interest rates to rise, they often sell government bonds, leading to higher yields and thus mortgage interest rates. The housing market continues to fall under the weight of record high house prices and higher mortgage rates. Mortgage applications have declined, with a weakness in both purchase and refinancing applications pushing the market index to its lowest level in 22 years, according to Joel Kahn, vice president of the Mortgage Bankers’ Association for Economic and Industrial Forecasts.
Buyers of average-priced homes are looking for a monthly mortgage that is 53 percent higher than a year ago, adding an additional $ 670 to their monthly expenses.
Exacerbating the pressure, Ratiu said, nearly 20 states have average gasoline prices above $ 5 a gallon, raising the cost of living to new highs, especially after employers are asking workers to return to offices.
“The economic outlook is highly dependent on the well-being of the American consumer,” Ratiu said. “For many Americans looking for affordable housing, medium-sized cities remain a viable alternative, especially as the number of homes for sale increases, bringing new opportunities.
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