Mortgage rates jump ahead of Fed rate hike

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Freddie Mac Mortgage Rates – March 10, 2022

What happened to mortgage rates this week:

The Freddie Mac fixed rate for a 30-year loan rebounded this week, with a 9 basis point advance at 3.85%, following the 10-year Treasury bond above 1.95%. Investors worried about rising inflation stemming from a likely ban on Russian oil imports amid a spike in the price of U.S. crude to over $130 a barrel, the highest point in 13 years . Inflation continued to pick up in February at the fastest pace in 40 years, prompting broader concerns about a pullback in consumer spending in the months ahead. All eyes are on the Federal Reserve meeting next week as we expect the bank to raise the funds rate. The big question on the minds of many analysts is whether a 25 basis point hike will be enough given severe labor shortages and inflation at levels not seen since the 1980s.

What does that mean:

Real estate markets are experiencing accelerating prices, tight inventories and faster selling times, even before the start of the spring season. Realtor.com’s latest weekly data highlights the competitive landscape, with homes selling in 47 days or less, the fastest monthly rate on record, even before the pandemic. In turn, listing prices have once again hit new highs, raising further concerns for buyers who are feeling pressured by rising interest rates and inflation. At the current rate, the buyer of a median-priced home faces a mortgage payment about $290 more per month than a year ago. With an insufficient number of homes for sale, first-time buyers and homeowners looking for a home exchange are being stymied by soaring prices and higher interest rates. The real challenge for Americans is that high inflation is eating away at growth in wages and salaries, in addition to soaring housing and the cost of living.


George RatiuGeorge Ratiu

George Ratiu


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