Mortgage interest rates hit 5% annual percentage rate (APR) this week for a 30-year fixed-rate loan, the highest point in more than a decade, according to the latest data from Freddie Mac.
This increase is up from 4.72% last week and 3.04% last year, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending April 14.
"This week, mortgage rates averaged five percent for the first time in over a decade," Freddie Mac Chief Economist Sam Khater said. "As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation."
If you are interested in refinancing your mortgage, it's wise to shop around and compare mortgage interest rates from multiple lenders. You can visit Credible to find your personalized rate without affecting your credit score.
Homeownership becomes most expensive in a generation, expert says
Other mortgage rates also increased this week. The average 15-year mortgage rate rose to 4.17%, up from 3.91% last week and 2.35% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 3.69%, up from 3.56% last week and 2.8% last year.
One expert explained that while the 30-year mortgage rate's increase to 5% is the highest rate since 2011, home prices at that time were less than half of what they are today. This has made getting a loan more expensive for borrowers who are saving up for a down payment or comparing their monthly mortgage payment amount.
"Many first-time buyers are still feeling the sting of sticker shock, with the mortgage payment for a median-priced home running $530 above a year ago, adding over $6,300 to the annual housing budget," George Ratiu, Realtor.com's senior economist and manager of economic research, said.
If you want to reduce the interest rate on your loan, you can visit Credible to compare multiple mortgage lenders at once and choose the one with the best rate for you.
Has inflation peaked?
While investors worry about rising prices, Ratiu explained that he thinks inflation may not have already hit its peak.
"Hopes of a cooling may be premature, given the jump in producer prices, which advanced at the fastest pace on record," Ratiu said.
"With consumers paying more at the pump, for groceries, clothes and travel, not to mention for necessities like health and child care, businesses are growing increasingly concerned about potential pullback in spending," he continued.
Comparing your mortgage interest rate can potentially help you save money even as rates rise. To see if mortgage refinancing is right for you, you can contact Credible to speak to a home loan expert and get all of your questions answered.
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