Mortgage rates hits pandemic era high
30-year fixed-rate mortgage: 3.69%
It is not just food and energy prices that are getting more expensive, add borrowing costs to the list as bond yields spiked.
Mortgage rates have returned to pre-pandemic levels with the 30-year fixed-rate hitting 3.69% as of Thursday, according to Freddie Mac.
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"Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand," said Sam Khater, Freddie Mac’s chief economist.
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Yields on the 10-year Treasury, which dictates mortgage rates, rose to 2%, the highest level since 2019, after the Consumer Price Index jumped 7.5% in January, the highest in nearly 40 years.
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Rates for a 15-year adjustable-rate mortgage or ARM, also rose, to 2.93%, while a 5/1 ARM ticked up to 2.8%.
Higher rates will accompany higher home costs tied to short supply, according to the National Association of Realtors. In the fourth quarter, mortgage payment for an average single-family home valued around $361,700, with a 20% down payment, was $1,240 or $201.
That's a nearly 17% jump from a year ago. Expect those figures to rise well into 2022.