Mortgage rates surge past 3% for the first time since June
If rates continue to tick up, that could help moderate surging prices, according to Sam Khater, chief economist at Freddie Mac. .
Mortgage rates in the United States have jumped above 3 percent for the first time in three months.
The average for a 30-year loan was 3.01 percent, up from 2.88 percent last week and the highest since June 24, Freddie Mac said in a statement Thursday.
Historically low borrowing costs have helped fuel the pandemic housing rally, with a shortage of available homes pushing prices higher as Americans seek larger properties in the suburbs.
If rates continue to tick up, that could help moderate surging prices, according to Sam Khater, chief economist at Freddie Mac.
“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.
Many potential buyers have struggled to find homes they can afford or lost bidding wars in a market where cash offers have dominated. That’s fueled mounting concerns about affordability, especially for renters looking to become homeowners.
The 30-year average sunk in 2020 and reached a record low of 2.65 percent at the beginning of this year. It has climbed since then, tracking yields for 10-year Treasuries, which have been above 1 percent since January.
The 10-year yield rose above 1.5% this week for the first time since June.
With the economy bouncing back from the pandemic, Federal Reserve Chair Jerome Powell said last week the US central bank could begin scaling back asset purchases in November. That came after officials revealed a growing inclination to raise interest rates next year.
“The biggest risk to mortgage rates right now is inflation,” said Greg McBride, chief financial analyst at Bankrate.com. “Nobody really knows what the path is.”
In a statement issued Thursday, the National Association of Realtors urged consumers not to “panic,” noting that rates are still historically low. ” The association is forecasting that rates for the 30-year-fixed loan will reach 3.5 percent by mid-2022.
Subscribe to the Globe’s free real estate newsletter — our weekly digest on buying, selling, and design — at pages.email.bostonglobe.com/AddressSignUp. Follow us on Facebook, LinkedIn, Instagram, and Twitter @globehomes.
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com