US Mortgage Rates Hit 14-year high as Inflation Soars

19 Sep 2022
 
According to a Freddie Mac report on Thursday, mortgage rates in the US has increased since the 2008 financial crisis as the country battles to rein in soaring prices. The most popular home loan product, 30-year fixed-rate mortgage has jumped to 6.02% this week which is more than double of the last year’s rate. The 15-year, fixed-rate mortgage averaged 5.16%, versus 4.98% last week. Last year at this time, they averaged 2.19%.
 
“Mortgage rates moved higher over the course of last week as markets continued to re-assess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher for longer.”
 
said Mike Fratantoni, MBA chief economist, in a statement.
 
Mortgage rates could rise as experts predicted inflation would hit 9.3% – so it surpassed expectations, driven largely by rising prices of fuel and food. The cost of a typical home in the US was more than $400,000 (£348,000) in July, up more than 10% from a year earlier. Sam Khater, Freddie Mac’s chief economist said,
 
“The combination of rising rates and high home prices is the likely driver of recent declines in existing home sales.”
 
The median U.S. home price rose 15% from a year earlier to $407,600 in May, the first time it has exceeded $400,000, NAR said on Tuesday. At the same time, existing home sales fell to a seasonally adjusted 5.4 million at an annualized pace, the lowest in more than a year, according to NAR data.
 
(Photo: Credit)