According to latest data from Freddie Mac.
“Mortgage rates have continued to rise this week due to the trajectory of the economy and the pandemic,” Freddie Mac chief economist Sam Khater said Thursday. “Even though the availability of existing housing improves, prices remain high due to demand from home buyers and limitations in housing starts and permits resulting from labor and material shortages. Despite these offsetting forces, we expect the housing market to end the year. “
Even with the strength of the housing market, mortgage rates will continue to rise slowly as the Federal Reserve ends its stimulus program to buy bonds. If you want to take out mortgage refinancing at current rates before they go up, visit Credible to find your personalized rate without affecting your credit score.
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Rate hike to lead to a more expensive housing market
The 3.09% annual percentage rate (APR) increase for 30-year mortgages for the week of October 21 is up from 3.05% the week before and 2.8% last week. last year, according to data from Freddie Mac.
Likewise, the 15-year fixed rate mortgage fell to 2.33%, down from 2.3% the previous week and is the same period last year. The five-year Treasury-indexed variable-rate hybrid (ARM) mortgage fell slightly from 2.55% to 2.54% this week. This is also a decrease from 2.87% last year.
“Real estate markets are settling into a more typical seasonal groove as we move through October, with the overheated growth in cooling prices from early 2021,” said George Ratiu, director of economic research from Realtor.com. “There are still more hopeful buyers than homes available for sale, even though the properties spend a bit longer in the market. In turn, price growth has slowed, rising 8.6% last week from the double-digit pace last year.
“However, rising mortgage rates are squeezing the budgets of many first-time buyers,” Ratiu said. “Mid-priced homebuyers who lock in the rate today will spend $ 145 per month more than a year ago, adding more than $ 1,700 to their annual payments.”
With interest rates expected to rise, buying and refinancing homes will continue to get more expensive. If you want to lock in your low rate now to lower your monthly mortgage payment, visit Credible to compare several lenders at once and choose the best mortgage lender for you.
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Rising mortgage interest rates will continue until December
Mortgage rates rose for the second week in a row and economists expect the upward trend to continue, hitting just under 3.5% by the end of the year.
“The Freddie Mac fixed rate on a 30-year loan rose again this week, following the bullish momentum of the 10-year Treasury, which hit its highest level since mid-May this week,” Ratiu said. “The rate rose four basis points to 3.09%, as investors and markets digest that the massive monetary stimulus of the past eighteen months has materialized into higher prices across the board. .
“Equally important, with employers finding they have to pay higher wages in the fight to fill more than 10 million open jobs, inflationary pressures are not expected to ease anytime soon,” he said. . “In other words, the double blow of rising inflation and The Fed decreases its asset purchases will continue to push up mortgage rates, likely reaching 3.4% by December. “
Inflation has recently increased at an annual rate of 5.4%, the highest rate in 13 years, according to the US Bureau of Labor Statistics (BLS). And now economists say inflation is high prices are not transitory. But as inflation pushes rates up, borrowers can keep their mortgage rates low by visiting Credible and comparing multiple lenders at once to find the best option for them.
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