Mortgage rates have jumped, home sales have slumped and credit cards and auto loans have gotten pricier
HOW WILL THIS AFFECT CREDIT CARD RATES?
John Leer, chief economist at Morning Consult, a survey research firm, said its polling suggests that more Americans are spending down the savings they accumulated during the pandemic and are using credit instead. Eventually, rising rates could make it harder for those households to pay off their debts.
Caldwell added that the entire increase isn’t passed on to consumers; some automakers are subsidizing rates to attract buyers. Bankrate.com says a 60-month new vehicle loan averaged just over 5% last week, up from 3.86% in January. A 48-month used vehicle loan was 5.6%, up from 4.4% in January. In general, banks tend to capitalize on a higher-rate environment to boost their profits by imposing higher rates on borrowers, without necessarily offering juicer rates to savers.Last week, the average fixed mortgage rate topped 6%, its highest point in 14 years, meaning that rates on home loans are about twice as expensive as they were a year ago.