Washington — US average long-term mortgage rates have risen again this week in a rapidly chilling housing market as the Federal Reserve prepares for yet another rise in benchmark rates.
Mortgage buyer Freddie Mac reported Thursday that 30-year interest rates rose from 5.51% last week to 5.54%. A year ago, the average 30-year rate was 2.78%.
The average interest rate on 15-year fixed-rate mortgages, which are popular for refinancing homes, rose from 4.67% last week to 4.75%. The percentage at this point last year was 2.12%.
Most economists expect the Fed’s borrowing rate to rise another half to three-quarters when it meets next week. Fed policymakers suggest that much higher interest rates may be needed to dominate stubborn 40-year high inflation. The central bank already raised its benchmark interest rate by 0.5 points in May and another three-quarters last month. This is the largest single increase since 1994.
Soaring interest rates run the risk of putting the US economy into recession, but it’s also the Fed’s most powerful tool for returning inflation to its annual target of 2%.
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The Ministry of Labor reported last week that the consumer price index has risen 9.1% over the past year, the largest annual rise since 1981. ..
High borrowing rates set aside many house hunters and cooled the bright red housing market, one of the most important sectors of the economy. The National Association of Real Estate Agents said Wednesday that sales of previously occupied US homes slowed in June for the fifth straight month.
House prices continued to rise in June, albeit at a slower pace than earlier this year, despite slowing sales. Median home prices across the country rose 13.4% year-on-year to $ 416,000 in June. According to NAR, this is a record high, according to data dating back to 1999.
Sam Carter, Freddie Mac’s Chief Economist, said: “As a result of these factors, we expect the rise in home prices to ease significantly.”
The Mortgage Banking Association said Wednesday that mortgage applications were down 19% from last year and refinancing was down 80% to the lowest level in 22 years.
Layoffs in the housing and lending sectors have already begun. Online mortgage lenders loanDepot, online real estate brokers Redfin and Compass have reported headcount reductions in recent months.
JPMorgan Chase, the country’s largest bank in terms of wealth, has dismissed hundreds from its mortgage sector and reassigned hundreds to jobs elsewhere in the company.
Average long-term mortgage rates in the US reach up to 5.54% – wake-up call
Source link Average long-term mortgage rates in the US reach up to 5.54% – wake-up call