Mortgage rates rose this week after dropping the previous two weeks, as inflation worries continue to grow among investors, according to the latest data from Freddie Mac.
The 30-year fixed-rate mortgage increased to 3.85% annual percentage rate (APR) for the week ending March 10. This is up from 3.76% last week and 3.05% last year.
"Following two weeks of declines, mortgage interest rates rose this week as U.S. Treasury yields increased," Freddie Mac Chief Economist Sam Khater said. "Over the long-term, we expect rates to continue to rise as inflation broadens and shortages increasingly impact many segments of the economy. However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short-term."
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Investor concerns over inflation grow amid surge in gas prices
The 15-year mortgage also rose this week, to an average rate of 3.01%. This is up from 3.09% last week and 2.38% last year, according to Freddie Mac. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) grew to 2.97%, up from 2.91% last week and 2.77% last year.
This comes as gas prices are reaching new record highs, with the national average at above $4 per gallon, according to data from AAA. George Ratiu, Realtor.com's manager of economic research, believes that rising prices are a cause for concern among investors.
"Inflation continued accelerating in February at the fastest pace in 40 years, sparking broader concerns about a consumer spending pullback in the months ahead," Ratiu said. "All eyes are on the Federal Reserve meeting next week, as we expect the bank to increase the funds rate."
Consumers looking to reduce their monthly expenses amid rising inflation could consider refinancing their mortgage at a lower interest rate. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best mortgage rate for you.
Federal Reserve prepares for next rate hike
The Federal Reserve recently signaled that it expects to raise the federal funds rate by 25 basis points during its March meeting in order to combat the surge in inflation. Ratiu, though, says that the upcoming rate hike may not be enough to bring inflation back down.
"The big question on many analysts’ minds is whether a 25 basis point hike will be enough given the significant shortage of labor and inflation at levels not seen since the 1980s," he said.
If you're trying to reduce your monthly expenses amid surging inflation, you could consider refinancing your mortgage. Doing so at a lower interest rate could help lower your monthly payments. Credible can help you compare mortgage lenders and discover the best refinance rates available today.
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