Interest rates rose above a 3% annual percentage rate (APR) for a 30-year mortgage for the first time since June, according to the latest data from Freddie Mac.
The 30-year average mortgage rate increased above the 3% mark to 3.01% for the week ending Sept. 30, 2021, according to the Primary Mortgage Market Survey from Freddie Mac. This is up from last week’s 2.88% and from 2.88% last year.
"Mortgage rates rose across all loan types this week as the 10-year U.S. Treasury yield reached its highest point since June," Freddie Mac Chief Economist Sam Khater said. "Many factors led to this increase, including the Federal Reserve communicating that it will taper its support of the capital markets, the broadening of inflation and emerging energy supply shortages which compound other labor and materials shortages."
Despite the recent jump, interest rates have generally hovered around historic lows, and many homeowners could still benefit from refinancing their mortgages. Visit Credible to find your personalized rate and see how much you could save on your loan amount.
Mortgage rates to continue to rise
The 15-year fixed-rate mortgage also increased, rising to 2.28% from 2.15% the previous week but still down from 2.36% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage increased from 2.43% last week to 2.48%. Last year, the five-year ARM averaged 2.9%. And, economists predict these rising interest rates could continue.
"We expect mortgage rates to continue to rise modestly which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year," Khater said.
If you want to take out a mortgage or refinance before current rates increase, visit Credible to compare multiple mortgage lenders and choose the one with the best interest rates to lower your mortgage payments. You can get pre-approved in minutes without affecting your credit score.
Rising rates signal improving economy
The latest surge in interest rates marks the largest one-week climb since February, and ended seven straight weeks of stagnant rates. Economists predict that interest rate increases could continue and add that it's a sign of an improving economy.
"These increases were caused by the recognition that the economy is doing well and that growth will likely continue," Realtor.com Chief Economist Danielle Hale said. "This sentiment was boosted by the Fed’s statement last week that the economy had made enough progress toward economic goals that tapering of asset purchases may be warranted soon. While uncertainty over a variety of legislative priorities – from infrastructure plans to the debt limit – increase the potential for surprises and volatility in rates, the likely near-term trend is for rates to move higher."
Borrowers considering refinancing could lower their monthly mortgage payments by taking out a refinance before rates increase further. Contact Credible to speak to a home loan expert and get all of your questions answered.
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