U.S. long-term mortgage rates have risen for the 5th straight week
Mortgage rates are approaching 5%, a level not seen since February 2011, when a typical home in the U.S. cost $166k.
U.S. mortgage rates rose for a fifth straight week, continuing a steep climb that has dented demand for loans.
The average for a 30-year loan was 4.72%, up from 4.67% last week and the highest since December 2018, Freddie Mac said in a statement Thursday.
Borrowing costs have soared since the start of the year, crushing the mortgage-refinancing business and hurting affordability for those stretching to buy a home. After a quarter-point hike last month, the Federal Reserve is weighing more increases to its benchmark interest rate and signaling it will reduce its bond holdings, further tightening credit.
Mortgage rates are approaching 5%, a level not seen since February 2011. At that time, the price of a typical home in the U.S. was $166,000, less than half of what it is now, according to George Ratiu, manager of economic research for Realtor.com.
Price gains have accelerated as investors scoop up listings and wealthier buyers move to more affordable locations, fueling bidding wars. While demand has held up throughout the pandemic, some people are getting priced out of the market.
Applications to purchase homes with Federal Housing Administration mortgages, a key source of financing for first-time buyers, fell almost 20% last week from a year earlier, according to the Mortgage Bankers Association.
Freddie Mac’s average rate is lower than what many buyers have been able to get recently. Eric Katsikas, a loan officer with Family First Funding based in Kingston, N.H., said he’s quoting 5.25% for a 30-year conventional purchase mortgage. The jump was so quick that some buyers are having sticker shock.
“I have a customer who was shopping with me four months,” Katsikas said. “They took a pause and weren’t expecting the rate to be as high as it was when they returned. There’s some regret there.”
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