The rate on the 30-year fixed mortgage reached the highest level of the year this week, climbing to 6.81%. It’s the second consecutive week of higher rates.
These high rates combined with low inventory continue to price many potential homebuyers out of the market," Khater continued.
Mortgage rates don’t necessarily mirror the Fed’s rate increases, but tend to track the yield on the 10-year Treasury note. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.Beginning with its first hike in March 2022, the Fed has lifted its benchmark interest rate to about 5.1%, its highest level in 16 years, before forgoing a hike at its meeting of policymakers last month.
The average rate on a 30-year mortgage remains more than double what it was two years ago, when ultra-low rates spurred a wave of home sales and refinancing. The far higher rates now are contributing to the low level of available homes by discouraging homeowners who locked in those lower borrowing costs two years ago from selling.is also a key reason home sales have been slow this year. Last month, sales of previously occupied U.S. homes were down 20.
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